Taxi Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The taxi industry has been one of the longest-running industries, contributing significantly to the world’s economy. However, the rising ride-hailing and taxi sharing demand are replacing the conventional taxi market.

Ride-hailing is anticipated to lead the taxi market over the forecast period. According to some surveys, a total of 15 million ride-hailing trips happen each day, which is expected to gigantically increase and hit a 100 million mark, by 2030.

Several ride hailing companies are raising funds from investors with an aim to improve their technology and provide better services to its customers. For instance,

• In December 2020, Estonian ride-hailing firm Bolt raised EUR 150 million (USD 182 million) in a funding round led by D1 Capital Partners. The company said it will use the money to develop driver face verification and use machine learning to prevent potential incidents. The firm’s app now counts more than 50 million users in over 40 countries across Europe and Africa.
• In November 2020, Meru cabs announced that they are planning to raise USD 54.25 million (INR 400 Crore) from private equity funds. The fundraising plan comes at a time when the company is sharpening focus on providing cabs to corporates and expanding its base of electric vehicles in India.

Owing to the modern taxi category, i.e., booking through mobile application, Uber and Grab gained immense traction from passengers. As more than 70% of the passengers consider taxi service as a convenient and quick commuting feature, the market has immense potential over the forecast period.

The taxi market is on the rise in the Asia-Pacific. Players, like DiDi Chuxing, Ola, and Onda, are using the high smartphone penetration rate in Asia-Pacific to their full advantage and are capturing the market share through innovation and cutting-edge technology. These South Asian taxi giants are acing the competition in local geographies and are expanding overseas. Chinese taxi giant Didi Chuxing has started operations in Mexico, Australia, Costa Rica, Japan, and many other countries, whereas the Indian market leader Ola is serving in Australia, New Zealand, and the United Kingdom.

China has the world’s largest taxi market, and this can be attributed to it being the most populous country. The taxi market in the country began to blossom in the early 1980s. Due to their flexibility, comfort, good availability, and end-mile connectivity offering, taxis quickly became an indispensable service.

India is the second-most populous country in the world, and most of the people fall under the middle-class category who utilize cabs and auto-rickshaws (local three-wheeler taxis) for commuting short distances. The taxi industry is changing continuously even on a quarterly basis, due to the different socio-economic and political situations arising in the country. Pooling/sharing of taxis in the country saw a huge demand and now the bike taxi is becoming even more popular.