Car sharing market on the eve of strong growth

The increase in urban traffic has led to growing congestion, pollution and a lack of parking spaces. Some doomsayers even predict a total collapse of urban traffic. One of the solutions to the urban traffic problem could be car sharing. Recent figures indicate a growth of the car sharing market through 2027.

Increasing demand

The car sharing market expansion is impelled by increasing digitalization at the global level and the development of mobile apps for the selection and booking of cars. The industry growth is majorly driven by the increasing adoption of electric vehicles in their fleet by key market players on account of the rising government regulations on clean transportation. The availability of a range of car models comprising luxury and high-end cars with low rental charges will augment the demand for car sharing services in the forthcoming years.

Owing to these factors, the car sharing market size is anticipated to surpass USD 6.5 billion through 2027, as cited by the latest research by Global Market Insights, Inc.

COVID-19

The car sharing industry was negatively impacted in 2020, however, owing to the spread of COVID-19. Several car-sharing service providers including Zoomcar, Gett, and others had to close their operations owing to the strict lockdown and stringent mobility restrictions, which impacted the market growth. Companies are resuming their operations and are following strict safety & sanitizing protocols to overcome the challenges during the pandemic.  

Rising number of users

The number of registered users for station-based carsharing services may very well nearly triple in the coming years, from 55 million in 2020 to 147 million in 2025. Based on a report by Berg Insight, the users of free floating carsharing could increase to 43 million by 2025, up from 17 million in 2020. Not only will users grow, but also fleets. All station-based carsharing vehicles combined could reach a fleet size of 759,000 in 2025, up from 366,000 in 2020. The forecast for free floating fleets is expecting more than 210,000 in-fleeted vehicles by 2025, up from close to 100,000 vehicles in 2020.

Increasing adoption of free-floating model

The free-floating segment is expected to record appreciable growth owing to its surging popularity among millennials. The adoption of free-floating models enable consumers to pick and drop cars from any location across the city, making transportation easier.

Moreover, companies are collaborating with car manufacturers for built-in GPS systems for providing better services.

Car sharing companies

Key car sharing companies are focusing on the adoption of strategic moves such as partnerships, collaborations, mergers, and acquisitions for consolidating their share in the market.

For instance, in May 2021, Estonian ride-hailing business, Bolt, announced the roll-out of its car-sharing service in Europe as it considered the diversification of its revenue streams. Similar to Drivy and ZipCar, Bolt Drive will enable customers to hire a car on demand for a brief period through the Bolt app, which can also be utilized for hailing a taxi, renting e-scooters and bikes, as well as for ordering food.

Industry players

Furthermore, industry players are also taking a keen interest in the development of user-friendly car sharing apps and online platforms for the purpose of marketing their services.

To cite an instance, in February 2019, Daimler AG entered into a partnership with BMW for the provision of car sharing services under ShareNow, a new brand. The companies together made an investment of more than USD 1.1 billion in the marketing and development of their car sharing services that carry on their primary operations in Europe.

Regulations

In a nutshell, the formulation of strict government regulations for the reduction of carbon emissions will boost car sharing market size through the projected period.

Sources

https://www.gminsights.com/industry-analysis/carsharing-market
https://inversmobility.medium.com/the-current-state-of-carsharing-an-industry-overview-7b4154e49a63
https://www.berginsight.com/the-carsharing-telematics-market

Written by: editors Smart City Hub

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