Apps like Uber and Lyft were created because people were frustrated with existing transportation options. They wanted to use technology to create something more convenient and affordable than hiring a taxi or renting a car. It now seems as though the public at large agrees with the folks behind these apps as Uber and Lift now outperform taxi and car rental companies in terms of market share.
Rideshare apps, taxis, rentals, and other services all operate in what in an area known as reimbursed ground transportation. The industry covers most ground-based business travel. When people travel on business, they often can’t bring their own vehicle with them, so their company has to reimburse them for travel costs. It’s a big industry that was dominated by a few old companies until recently. The number of car rental companies left is a sign of just how powerful a few names are. Three umbrella companies own 95% of the rental car market.
Taxi companies are more diverse than rental brands, but it could be said that they are more entrenched. Many taxi companies enjoyed something like monopolies in their respective cities. But these companies are taking the biggest hit in the new market. In 2014 Taxis accounted for almost 40% of all reimbursed ground transport according to Certify. And rentals accounted for around 55%, leaving rideshare apps with around 5%. But now the tables have turned dramatically. Taxis dropped to around 5%, rentals plummeted to around 23%, and rideshare apps skyrocketed to market dominance at 72.5%!
The ride hasn’t always been smooth for Uber and Lyft. Both have had to deal with legal challenges and Uber has had some serious PR problems. But these bumps have been relatively minor when you look at the way that these apps have come to capture the reimbursed travel field at lightning speed.
Traditional industries aren’t exactly taking things sitting down, but their efforts might be too little too late. Now rental companies are offering ridesharing options, and taxi companies have apps of their own. But rental and taxi companies spent a little too long trying to shut down ridesharing rather than changing with the times, and it could be that the days of taxis are numbered.