Ride Sharing Could Be a Huge Growth Market

The growth of ride-sharing is both a challenge and an opportunity for insurance brands, especially insurtechs. Understanding exactly who the customer is at the point of quote, plus passengers, and gathering all data on the vehicle history, driver behaviour, typical routes etc is crucial to underpinning viable insurance rates per trip.

A new study by Juniper Research has found ride sharing spending by consumers globally will exceed $937 billion by 2026, comparable to 50 times the combined annual revenue of Transport for London, New York City’s MTA, and Beijing Metro in 2021. This spend represents an increase from $147 billion in 2021 and total growth of 537% over the next 5 years.

The research identified consumers in the US and China as leading global spend on ride sharing services; accounting for 65% of market value in 2026. It highlighted future government initiatives to reduce private vehicle usage in cities, allied with a strong pandemic recovery, as key to these countries’ positions as leaders.

For more insights, download our free whitepaper: What’s the Next Destination for Ride Sharing?

Platforms Must Emphasise Carpool Services to Improve Environmental Credentials

However, the new report, Ride Sharing: Value Chain Analysis, Market Size & Forecasts 2012-2026, cautioned that only 13% of consumers are set to use carpool-style ride sharing services in 2026, with the remainder opting for single-occupancy services; reflecting that the majority of consumers are willing to pay a premium for the privilege of travelling alone.

It noted while this is understandable given the ongoing pandemic, the emissions generated by single-occupancy services mean platforms must explore non-financial incentives to drive adoption of carpool services. This could include collaborating with city authorities to allow carpool vehicles to use public transport-only lanes, to make these services attractive in terms of both cost and efficiency.

Research author Adam Wears explained: “There are multiple strategies ride sharing platforms must leverage to drive adoption of carpool services, but these will need to be implemented carefully to avoid the perception of prioritising carpool users over non-carpool ones. If implemented poorly, this will generate a negative reaction from users and lead to increasing competing services.”