Carsharing Market Size worth over $9bn by 2026
Published Date: April 9, 2020 Authors: Preeti Wadhwani, Prasenjit Saha
Carsharing Market size is set to surpass USD 9 billion by 2026, according to a new research report by Global Market Insights, Inc.
The market is primarily driven by ongoing technological developments that improve the accessibility and performance of rental cars. Leading companies are developing IoT and AI technologies for ride-sharing cars to enhance security and user experience, boosting the market growth.
For instance, in January 2020, Qualcomm launched its new car-to-cloud service, which aids companies to connect their vehicles to a cloud-based platform. This service enables sharing service providers to gather vehicle usage data and provide on-demand infotainment systems in the car.
Industry startups are leveraging these technologies to improve the driving experience in sharing services. For instance, a California-based car sharing startup, Go360 uses multimodal pooling technology in cars for efficient routing of vehicles.
Government authorities across the globe are providing incentives to encourage new players to enter the market. For instance, in April 2019, the New York State Department of Transportation (NYSDOT) in collaboration with New York State Energy Research and Development Authority (NYSERDA) announced a funding of USD 3 million to encourage projects that improve the efficiency of transportation system and help in reducing harmful vehicle emissions. This initiative encourages the development of new mobility services in the region.
The major factor challenging the carsharing market demand is the lack of trust, confidence, and public awareness about urban mobility services. However, service providers are focusing on assisting their customers with onboard support systems integrated with smart sensors to increase the reliability of these services.
Several countries across the globe witnessed an outbreak of COVID-19 in 2020. The spread of this virus over the months has hampered the world economy on a wider scale. Government-enforced lockdowns in various countries including the U.S., China, Italy, Spain, the UK, and India, which has led large number of businesses to be shut down temporarily, slowing down the growth of the market.
The increasing demand for flexibility in carsharing services
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The free-floating segment held around 35% of the market share in 2019 due to increasing demand for flexibility in car sharing services. Free-floating mode allows customers to leave their cars at any designated public parking spot in a predefined area in the city after completing the journey. Increased flexibility in booking the vehicle, on-demand services, and pay-as-you-go fares are major market factors contributing to market size expansion.
Free-floating sharing services also offer additional benefits such as increased vehicle utilization and reduced usage of private vehicles on the road. The increasing cost of owning a vehicle coupled with rising traffic congestion on roads is fueling the adoption of free-floating carsharing services in the market.
Browse key industry insights spread across 225 pages with 246 market data tables & 28 figures & charts from the report, “Carsharing Market Size By Model (P2P, Station-Based, Free-Floating), By Business Model (Round Trip, One Way), By Application (Business, Private), Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2020 – 2026” in detail along with the table of contents:
Growing demand for affordable payment options
The round-trip segment dominates around 80% market revenue share in 2020 owing to its several advantages such as pay-as-you-go fares and long travel distances. The round-trip business model enables customers to return the car at the same station from where it was picked up after completing the ride.
This model is increasingly popular in emerging economies including India and China due to low initial investment costs. Industry participants are introducing round-trip business model to these countries to cater to the increasing market demand.
The round-trip carsharing model aids companies to reduce costs involved in the re-allocation of vehicles as per the customers’ demand. Companies have several stations present in residential and commercial areas across the city, allowing customers to pick up and return cars at their nearest stations.
Increasing requirement of safe and secure commute solution in urban areas
The private application segment generated over USD 450 million revenue in 2019 and is expected to grow substantially during the forecast timeline impelled by growing ease of renting vehicles for private usage through online platforms. P2P, station-based or free-floating car sharing services allow customers to share rides for short commute distances, offering them convenience and day-today transport solutions.
Online platforms assist users to select the vehicle type, track the vehicle location, and hassle-free payment options to avail sharing services. Market players are also providing vehicles for other applications such as cargo movement. For instance, Enjoy, a ride-sharing service in Italy provides its customers with mini cargo trucks to assist them in moving small cargo items across the city.
The proliferation of modern urban mobility solutions in Europe
The Europe carsharing market is anticipated to grow at CAGR of around 27% from 2020 to 2026, led by presence of several service providers and increasing adoption of Electric Vehicles (EVs). The growing need to reduce carbon & nitrous oxide emissions from vehicles is encouraging automobile manufacturers to launch new sharing services.
For instance, in June 2019, Volkswagen launched its free-floating sharing service, WeShare in Berlin. The vehicle fleet of WeShare consists of fully electric cars, covering an area of 150 km2. The company further plans its expansion in the city of Prague in partnership with Skoda.
Industry players are emphasizing on partnerships and collaborations with technology providers to innovate new urban mobility solutions and enhance their market share. Additionally, industry players are also focusing on strategic alliances to expand their geographic presence and provide customized sharing services, attributing to industry growth.
For instance, in January 2020, Green Mobility, a Denmark-based car sharing company formed a joint venture with Deurnese Trasnportmaatschappij NV, a local transport company in Belgium, to further expand its market share in Europe.
Key leaders in the carsharing market include Turo, Inc., Regina Car Share Co-operative, Zipcar, Inc., Lyft, Inc., Orix Corporation, CarShare Australia, Car2Go, Autolib, Communauto, Inc., Getaround, Inc., DriveNow GmbH & Co. KG, Car2Go, Carrotshare, Hour Car, Hertz Corporation, and Ekar Fz LLC.
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