Why Taxis and Car Rental Companies are Losing Share to Mobile Ride-Hailing

Mobile ride-hailing's impact on traditional taxis is at the core of the heated and ongoing debate over the service's fairness and legality. Less attention has been given to the competitive effects on limos, car rental services and other types of rides, but is that accurate? Actually, all forms of ground transportation are at risk of losing travelers to mobile ride-hailing. A new Phocuswright report, Hail This! The Transformation of the Ground Transportation Experience for Travel, analyzes the impact of mobile services and new business models on the ground transportation segment.

The mobile ride-hailing market rivals or exceeds taxis, prearranged car services and shuttles in both traveler use and spend. Business and leisure travelers spent US$1.5 billion on mobile ride-hailing services from July 2014 to June 2015.

Mobile ride-hailing is especially popular with urban millennials (18-34 years old) and managed business travelers. Two in three business travelers use mobile ride-hailing apps at home, and more than eight in 10 of these are millennial business travelers.


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"Mobile ride-hailing is wildly popular with millennial travelers, and as these users age, their use of mobile ride-hailing services could mean trouble for other forms of ground transportation," says Phocuswright's senior research analyst, Cathy Schetzina Walsh. "Taxis and prearranged car services are most at risk, but car rental also stands to lose managed business travelers, particularly if mobile ride-hailing players address corporate travel managers' concerns with liability and reporting."

Travelers choose mobile ride-hailing because it is convenient, but many business travelers also believe it provides superior service: Two-thirds of business travelers think the service is better, and one quarter chose mobile ride-hailing over other ground transportation options due to cleaner cars and safer drivers, respectively.


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Safety is rarely a concern for travelers. Fewer than one in 10 travelers who opt against mobile ride-hailing think it is unsafe or unprofessional.

Understand the impact of mobile services and new business models on the ground transportation segment – purchase Phocuswright's Hail This! The Transformation of the Ground Transportation Experience for Travel.