These 3 factors could threaten the future of the ride-sharing economy

Chances are, you or someone you know has two or three or more ride-share, car-share, or bike-share services apps on their smartphone. The app-driven shared mobility services we regularly use today started popping up less than 10 years ago, and now it’s hard to imagine life without them. Even taxi services are collaborating with ride-hailing apps.

But it might not always be like this.

We’ve been studying and analyzing personal transportation for a very long time and see the potential roadblocks ahead that may impact the livelihood of the shared mobility services we have all come to rely on.

History shows economics alone could swallow the industry

Ride-sharing isn’t new. Starting in the early 1900s, for a fee, entrepreneurial drivers would offer rides, an informal, unregulated arrangement with low overhead and decent profit. But regulatory actions imposed increased liability costs, which stopped operations for 90% of drivers in just three years.

Over the next century, shared mobility businesses were reinvigorated whenever there was a socio-economic downturn. Unfortunately, with every upswing, there was a movement to supersede it, such as the decline of gas prices in the 80s and 90s that encouraged car ownership rather than carpooling.

Predicting economic changes like these can help shared-mobility companies prepare for future consumer, driver, and local government actions and reactions that will impact the whole transportation industry.

Millennials’ habits are evolving

Millennials are currently the biggest, albeit not the only, rideshare market. They are more likely to live in the city, have debt, not own a car, and be open to trying innovative technologies. Yet as these 20- to 30-somethings mature, many will earn more income, move to suburban areas that have free parking and cheaper insurance rates, and require more convenient transportation for their young families.

And although millennials are buzzworthy now, people of all ages are changing how they get from place to place. Analyzing life patterns of different generations will help shared mobility companies stay one step ahead in providing value when and where it’s needed most.

Ride share companies are not taking advantage of analytics fast enough

Shared mobility companies are currently focused on gaining market share and creating a “wow” experience for consumers, which makes perfect sense. But these are not the only things that will garner success. Other significant challenges must be addressed to sustain long-term success, such as:

• How can we convince insurance companies to change their models, so that risk is shared appropriately between driver, consumer, and shared mobility company?
• How do we create a more efficient end-to-end transportation ecosystem that includes walking, riding, public transportation, and shared mobility?
• How can we deliver services to less dense or lower income areas while remaining profitable?
• How should insurance be set up for rideshare drivers who are off-duty or don’t have a passenger?

Avots: businessinsider