It’s rapidly nearing the end of 2018, which means ride sharing services have been around for nearly five years. In that short period of time, ride sharing has developed into a massively popular industry, shaking the foundations of transportation and revolutionizing the future of automotive travel. In fact, automotive manufacturers are so troubled by the rise of ride sharing that many have launched their own ride sharing programs or else partnered with major ride sharing brands.
In every city, there are dozens of ride sharing companies competing for space. Dozens more ride sharing brands emerge every month, striving to grab a piece of that lucrative pie. Thus, many would-be transportation entrepreneurs might hesitate to jump into the fray — but savvy business leaders recognize that now is the exact right time to launch a ride sharing venture. Here’s why.
Transportation Tech Continues to Change
Ever since the first cart was hooked to the first horse, people dreamed of riding in a vehicle that didn’t need their constant attention to deliver them comfortably and privately from point A to point B. These days, autonomous vehicles are a reality, though no one is exactly sure what that reality will look like for the transportation industry.
Automation isn’t the only technology changing the future of transportation. Already, smartphones facilitated the growth of ride and car sharing, and mobile technology is sure to enhance these industries in the upcoming years. The introduction of improved telematics and similar GPS-based tech will certainly alter the course of the transportation industry. Even the popularity of drones and unmanned aerial vehicles (UAVs) will likely revolutionize sectors of transportation.
The transportation industry at large is in turmoil. Never before has transportation been so up in the air, holding its breath to see how technologies will shake out when exposed to the consumer audience. Thanks to the seemingly endless supply of brand-new tech announced every quarter, it is impossible to predict where technology will take transportation, and when changes to the transportation industry will next occur. Whenever an industry is in the midst of disruption, it is a prime time for new startups to sneak in and claim space — and that’s why now is a great time to launch a ride sharing startup.
Ride Sharing Companies Rise and Fall
In the beginning, there was more that just Uber and Lyft. Seemingly every city had its own cadre of early ride sharing options, and some of them even expanded far and wide. For example, Uber’s main competitor for many years was an outfit known as Sidecar, which claimed a significant portion of users and even attracted the attention of major car manufacturer and transportation goliath General Motors.
Though Sidecar folded under the weight of competing with Uber, it is important to note that this once monumental company is no longer so. In 2016, Uber was named the champion of ride sharing, but several scandals in the years since have chipped away at that title. For example, Uber’s unwillingness to require driver background checks kicked them out of several cities, and the coverup of a major data breach has many customers looking for alternative ride share services.
Many Niche Markets Remain Unaddressed
So many smaller ride sharing companies are finding success not by trying to claw a piece of Uber’s or Lyft’s audience but by finding a forgotten audience of their own. As ride sharing has grown, states and cities have enacted certain legislation to ensure that drivers and passengers of ride shares remain safe, and larger, less agile companies have departed from those regions, unwilling or unable to comply with the new rules. Sometimes, it is a larger company’s own policies that prevent it from reaching a niche market; for example, Uber refuses to transport unassisted minors, and other companies won’t permit drivers to bother with trips to and from airports.
Entrepreneurs who are willing to grapple with slightly more complex transportation issues can find paying ride share users waiting in the wings. When markets are competitive, the best strategy is always to look for niches. Of course, the niche shouldn’t be too small that the audience cannot support the business, and it shouldn’t be too large to attract the attention of larger companies that can and will outcompete a newcomer. Still, there remains space for ride sharing startups — entrepreneurs need only look for it.