Mobility Disruptors | Ridesharing is Booming but Usage Barely Scratches Surface
February 15, 2017
By Dave Sargent
The first time I used Uber on a business trip—getting a ride from LAX to a client meeting 50 miles away—many of my coworkers recoiled in shock. Although they’re generally a worldly, tech-friendly bunch, I was peppered with questions like, “Isn’t that too far?”, “Wasn’t that really expensive?” and “What would you have done if you couldn’t find a car available to get back?”
And frankly, I had some of the same worries, too.
But frequent business travelers understand the hassle of “ground transportation.” After a long flight, this typically involves: a) standing in a taxi line waiting for the opportunity to pay a very large fee to catch a ride in an often well-worn and less-than-tidy vehicle or b) waiting for a shuttle bus to the rental car lot (which is frequently located miles from the airport) where the car waits for the driver to navigate it through rush-hour traffic.
Faced with those choices yet again, I decided to take a leap of faith. And I’m glad I did. I ordered up my own ridesharing car-and-driver from my iPhone, exited the terminal, waited a few minutes and jumped into a designated vehicle with a friendly driver that knew exactly where I was going. With my experiences, I have found rideshare vehicles generally are well-kept; the drivers are friendly and customer-oriented; and fees are more economical than the alternatives. I am sold.
I am part of a massive trend. Despite the industry being only a few years old, millions of rideshares are now being taken monthly, and billions of consumers dollars are spent on them annually. Ridesharing is being used across the world by all types of people in need of a quick, convenient and inexpensive commute, especially in urban areas.
Despite its explosive growth, ridesharing has still barely scratched the surface of consumer usage, even in the United States. According to J.D. Power’s latest data, 58% of U.S. consumers have heard of ridesharing but have never used it, while an additional 16% have never heard of ridesharing.
Percent of US Consumers Who Have Used Ridesharing Services
Of the 25% of people who have rideshared, the majority does so less than once a month while only 4% do so five times a month or more.
Still, given the logistical and financial advantages provided by ridesharing—and its rapid growth so far—it’s reasonable to forecast that more consumers will gravitate to ridesharing. Should this happen, it’s natural to wonder whether some consumers will forego personal vehicle ownership altogether in favor of ridesharing. Based on our survey, this scenario is entirely possible, with 26% of consumers saying they “definitely would” or “probably would” give up owning a vehicle altogether if effective alternative transport options were available.
Would You Give Up Owning a Vehicle if Effective Alternative Transport Was Available
With new-vehicle sales hitting 17 million units a year, having even a minority of consumers opt out of vehicle ownership would have a serious effect on the auto industry while creating all sorts of new opportunities for mobility companies.
That’s something to which the industry must give serious thought. I will be pondering it as well, especially from the passenger seat during my next rideshare experience.
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Dave Sargent is vice president, global automotive at J.D. Power. He has no intention of giving up his own vehicle. Yet.
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