Worldwide ridesharing at $285 billion per year by 2030 will be profitable when self driving

A recent Goldman Sachs study projected that the worldwide ride-sharing market could grow eight-fold by the year 2030, reaching $285 billion annually. Currently ridesharing is about $36 billion.

Right now, they estimate the global taxi market is worth $108 billion, which is triple the size of the $36-billion ride-hailing market. At the same time, they calculate an average of 15 million ride-hailing trips a day globally, which they expect to increase to 97 million by 2030.

That would translate to $65 billion in revenue for the ride-hailing companies by 2030, based on the assumption that the companies would take a 23% commission from gross market sales.

Didi Chuxing in China, bought Uber’s operations in that country last year and has invested in Lyft and India’s Ola as well.
Didi has become Asia’s most valuable startup, worth some $50 billion based on a recent funding round.

Uber’s new chief executive has vowed to take the company, valued privately at nearly $70 billion, public with a stock market debut by the year 2019. Lyft, with a valuation near $11 billion, is reported to be mulling a strategy to also go public.

Uber lost about $600 million in the second quarter of this year, after losing $2.8 billion in all of 2016. Ridership nevertheless is soaring.

Such red ink on balance sheets has not deterred investors with the resources of Alphabet or SoftBank, with amounts they have sunk into ride-sharing startups considered “pretty modest,” Jack Gold of J.Gold Associates told AFP.

Data from Ride-sharing is valuable

Ride-sharing services get to know about travel habits, schedules, and profiles of passengers and drivers, typically analyzing information with software to anticipate demand and improve service.

Such data can also be a treasure trove to mine in the development of self-driving cars, which have been touted as the future of urban transport.

With cars navigating themselves, passengers will likely spend more time immersed in on-board entertainment or services, likely streamed via wireless internet connections. Google and other online titans would profit from going along for the ride.

Human drivers are considered a prime expense for ride-sharing firms, which Goldman Sachs research found to be a “significant contributor” to the lack of operating profit. Fully autonomous vehicles could eliminate about 6.2 million drivers in the workforce, according to Goldman Sachs.

3 thoughts on “Worldwide ridesharing at $285 billion per year by 2030 will be profitable when self driving”

  1. The business model for these ride sharing companies seems broken if they will need to rely on self-driving cars to make a profit. When they start using self-driving cars they will have essentially become taxi companies and the existing taxi companies will also go self-driving and have an advantage of actually having always been a taxi company….

  2. Driverless ridesharing will be FAR less profitable than with the drivers financing, fueling, maintaining, inspecting, protecting and cleaning the vehicles. The rideshare companies don’t have 24-hour local / regional centers or even phone support, let alone what doing all that requires — they are totally inexperienced in all of the needed capabilities for owning a fleet. They’ll have to open thousands of locations each costing millions of dollars and hire around a hundred thousand full-time employees. The rideshare companies will also lose the independent contractor fig-leaf that protects them from liability and local laws and all the advantages of their super one-sided EULA-style contracts with the drivers. They’ll have to give up the exploitative profits they make on leasing used compact cars to desperate wretches for $700+ per month. They’ll even have to pay for the miles spent driving to pick up riders, too, for which they currently do not pay drivers.

    Driverless cars are totally insane as a business plan, but that rideshare companies somehow manage to lose money on the rackets they are running now, that shows they are insane, they really have no grasp of fundamental realities of business.

    • It shows that the rideshare companies are completely insane… OR it shows that you don’t understand their business model.

      1. Set up a super cool sounding business,
      2. get all the cool kids on the internet to be excited about it,
      3. use loopholes in the law and/or enforcement to arbitrage your way past existing businesses without paying the same expenses as they do
      4. Use your massive popularity with the general population to weasel out of any problems with step 3.
      5. Raise billions of dollars in various investment rounds.
      6. Sell out to Google or Amazon or Baidu for enough money to buy your own Swiss canton.

      See. Nowhere in the business model does your analysis matter at all.

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