Ride-sharing companies have featured prominently in technology news recently, largely due to the initial public offerings by both Uber and Lyft. Ride-sharing, despite the success of those two companies, is not without considerable challenges to its business strategy:
- Neither company is yet profitable, for instance, despite years of cash infusions by venture capital firms.
- Their drivers, who went on strike recently in the U.S., are often frustrated about conditions and pay scales.
- The technology they tout to replace drivers, self-driving cars, may be years away from regulatory approval.
Answers from India? Ride-Sharing Can Work with Vehicles Other Than Cars
However, there are different vehicles that may be the future of ride-sharing. In many U.S. cities, bicycles are provided for public use, for example. So far, these are provided by municipalities, and those efforts are largely driven by environmental concerns. Bikes emit no carbon emissions; motorized vehicles are a major source of them.
In other parts of the world, ride-sharing services use electric motorbikes rather than cars. In India, for example, two Silicon Valley venture capital firms, Sequoia Capital and Accel, are backing competitors to Uber that provide electric scooters that customers rent and drive themselves.
The motorbikes are popular in India for several reasons:
- Motorbikes are more popular than cars in the country – in fact, India is the largest global market for motorcycles, according to the New York Times. They outsell cars there six to one, with sales of 20 million annually.
- Motorbikes allow users to navigate more nimbly on India’s crowded streets. Cars can spend long periods in traffic, so motorbikes are faster, and thus more efficient methods of reliable transport.
- Ride-sharing a motorbike is far cheaper than ride-sharing a car.
- Motorbikes do use gas and thus have carbon emissions, but far less than cars or other vehicles.
- Perhaps most interestingly, ride-hailing services using motorbikes disrupt the ride-hailing industry in a manner analogous to Uber and Lyft’s disruption of the traditional taxi industry. Uber initially asked, “what if you didn’t need a licensed car and driver and a dispatcher system but used an app instead?” Bounce, a chief purveyor of ride-sharing motorbikes in India, asks, “what if you didn’t need a driver?” These motorbike ride-sharing services may come to disrupt the industry themselves.
The market in India is huge, at 1.3 billion people. Roughly 200 million people have a driver’s license for a two-wheeled vehicle.
Ride-hailed motorbikes and bicycles may end up disrupting the disruptor.
A U.S. Market?
Is there a market in the U.S.? There might well be a market for an analogous service, motorized scooters, and bicycles. Uber itself purchased Jump in 2017. Jump’s business is renting motorized scooters and bicycles. It currently has operations in about 25 places in the U.S. and Europe. Earlier this year, Uber indicated that rentals of two-wheeled vehicles were outpacing those of cars in at least one of its markets, Sacramento, California.
In other countries, bicycle rentals have failed. In India, for example, bicycles are not practical given the density and nature of traffic.
Nonetheless, two-wheeled vehicles such as motorbikes, scooters, and bicycles pose a disruptive possibility to car ride-hailing services that may both threaten and reinvigorate them in the future.