The ride-sharing industry organizations utilize recent technological advances to match drivers with passengers through a customer-to-customer (C2C) business model. Consequently, these type of firms operates rather as a platform to enable those owning a car to operate as a taxi whenever they wish. In this respect, ridesharing operates similarly to a taxi service. However, there has been an important difference in that ride-sharing companies often did not fall under the regulatory and licensing requirements that traditional taxi companies are subject to. This generally granted ride-sharing companies a price advantage over taxi companies, which is why ridesharing is generally considered a ‘disruptive’ technology. In recent years, regulatory agencies have been addressing this loop hole and ride-hailing is becoming increasingly tightly regulated. Nonetheless, ride-hailing has been continued eating into the taxi market share, while the
the taxi market is contracting.
Economic performance of the ridesharing market
The market-creating activity of the sharing economy has enabled the ride-sharing market to tap into the readily existing dormant supply of services and has challenged the status quo of taxi businesses In the United States. Over recent years, the ridesharing market has seen significant growth in potential and real economic performance. Ride-hailing revenue in the U.S.
has reliably outpaced taxi revenue in the past years. The differential is projected to continue growing. While ride-hailing revenue is on an upward trend, projected to grow to nearly 61 billion U.S. dollars in 2029, taxi revenue is expected to drop to under 19 billion U.S. dollars by the same year. U.S. consumers are already
more likely to use ride-hailing services than traditional taxi services.
Market dynamics between Uber and Lyft
Uber and Lyft are the largest players in the global ride-sharing market, with Uber remaining the dominating platform. In the global marketplace Uber benefits from being active in around 70 countries around the world, while Lyft is only active in the United States and Canada. In the U.S. Lyft is able to
claim a larger share of the market - 24 percent - than on the global stage. Despite its stronger presence on the U.S. market, it has to contend with Uber’s even stronger dominance in the United States, where Uber holds a market share of 74 percent. Compared to Lyft, Uber has been able to
establish a larger customer base in the United States, with more consumers reporting having used Uber in the past year than Lyft.
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