Speculation about the fate of the ridesharing industry is at its most dramatic point since Uber’s initial rise, when it reshaped the transportation marketplace years ago.
At the beginning of the summer, Uber’s CEO stepped down amid bombastic headlines and turmoil. This further stoked already apparent concerns about the company’s future. Yet just days ago, the Wall Street Journal and TechCrunch reported that Japanese tech-giant Softbank, U.S. investment firm Dragoneer, and Chinese ridesharing goliath DiDi Chuxing are negotiating the terms of a possible $10 billion investment in Uber Technologies Inc.
Needless to say, it’s difficult to predict what exactly the future holds.
Rideshare Market Review: The Future of the Ridesharing Industry
Uber Prepares Investing Rounds
While Uber reshuffles the executive team, preparing for investment rounds of such size means a few things for riders and drivers. As discussed here on Ridester, Uber has had success using investment rounds like this to attract both sides.
Further, it’s done this while simultaneously improving their technology. That means this new investment could mean more engaging deals and discounts for riders and increased pay for drivers. After all, Uber’s management knows well enough that without sufficient and satisfied drivers, you won’t be able to meet the demand of increased riders.
Lyft and Google Look Towards Deal
Meanwhile across town in San Francisco, Lyft plots to further chip away at Uber’s ridesharing market. Last week, TechCrunch reported that Google’s parent company, Alphabet Inc., was working on a $1 billion investment in Lyft.
According to the article, such an investment would allow Lyft to “use the capital to provide aggressive driver and rider benefits through promotions.” This comes along with news of Lyft’s progress on their expansion into even more domestic and international markets.
Via Allows Ridesharing to Become Carpooling
Diversified growth, though, may be more apparent in ridesharing newcomers like Via.
As the New York Times put it, “Via’s main focus isn’t on getting one or two passengers from one point to another so much as on smart car-pooling.” Some transportation experts see this kind of passenger-ferrying as the future of municipal mass transit. This is because, as they gain popularity, such services may improve traffic congestion dramatically. Part of Via’s strategic movement has been seeking partners that will use their technology to deliver a similar service.
The article notes, for example, that Mercedes-Benz and Via have partnered to provide ridesharing to the Orange County, CA area. Bloomberg even reported that Via’s cooperation with European automotive giant Daimler AG will provide ride-sharing shuttles to London soon.
Beyond their partnership savvy, Via currently operates in Chicago, New York City, and Washington D.C. Across this tri-city market alone they serve over a million riders a month.
Ridesharing Impacts Auto Industry
This trend in partnership is an encouraging sign for the industry. Despite some of Silicon Valley’s conservative pessimism, this summer has seen considerable investment and cooperation. A testament, perhaps, to ridesharing’s popularity and convenience.
After Honda and Toyota invested in Grab, a prominent ridesharing company in Southeast Asia, the business world’s commentary focused on automobile companies preparing themselves for further disruption of the current model of individual car ownership.
In just another example, GM’s spin-off Maven aims to provide their vehicles and rental agreements to rideshare drivers. According to The Verge, “Drivers could take out GM vehicles for $179 a week plus additional taxes and fees to earn money on the ride-sharing platform…reflecting a trend in the auto industry of spinning off new, millennial-friendly businesses as a hedge against perceived declines in personal car ownership.”
An interesting note here is that upon completion of Alphabet Inc.’s investment in Lyft, Alphabet Inc. and General Motors would each have invested in both Lyft and Uber. To see major companies investing in both sides of a marketplace competition is not only good for business, but it suggests confidence in the industry.
The War for Ridesharing Dominance
Ridesharing has provided solutions to transportation problems and overcrowded traffic congestion. Moreover, if this summer’s business activity was any indication, that isn’t changing anytime soon.
The war for the ridesharing industry is really still in the early chapters. Drivers may see the combative side of businesses like Uber and Lyft as anxiety-inducing. However, growth and competition in the industry will yield better rewards for those driving.
As we’ve already seen, Uber finally instituted tipping for their rideshare drivers. Until this summer, riders were unable to tip Uber drivers through the app. Pressure on the company forced their hand. Ultimately, Uber wanted to improve and retain their user base, especially those doing the driving. After all, drivers and their happiness are incredibly important to the success of these companies, as they would be unable to operate without them.
My Thoughts on the Future
The changing landscape of the ridesharing industry signals a thriving and busy environment. Partnerships enable more companies like Lyft and Uber more deeply entrench themselves in their respective markets. This, in turn, allows them to offer new services.
Ideas like Uber Eats, a food delivery platform carried out by drivers, offers, even more diversification of ride requests. Consequently, this gives drivers a larger customer base and a possibly better income.
With the emergence of Lyft, the battle-tested competitiveness of Uber, and the rise of new services like Via and Maven, a healthy market for drivers in the gig economy still exists — and will for some time.
How do you think the ridesharing industry is going to develop in the next few years? Let me know in the comments below!