Widespread availability and convenience to underline appeal of ride-hailing, ride sharing, vehicle subscription, and bike sharing

Shared mobility services have witnessed a sharp growth in India over the last few years, with the fleet strength of ride-hailing services growing by a substantial 50.4% in 2018 compared to the previous year. Currently, the strength of shared mobility fleet in the country is two million units. According to a new study by Frost & Sullivan, Strategic Assessment of Shared Mobility Market in India, 2019, the market is expected to further grow at a CAGR of 9.7% between 2019 and 2025 to reach 4.7 million. Total revenue from ride-hailing services is valued at $22.40 billion, and is expected to grow at a CAGR of 13.7% over the 2019- 2025 period.

The shared mobility market is expected to be driven by the steady increase in urbanization, millennial population, and government initiatives. However, the lack of clear regulations, availability of cheaper modes of transport, and the presence of unorganized players serve as restraints on the market. Providing first-to-last mile services, adoption of new business models, Blockchain, and data monetization will help companies grow faster.

Shared Mobility Picks Up Pace

Shared mobility services are at a nascent stage in India. It comprises two major segments – ride-hailing and ride sharing. There are more than 30 companies in the shared mobility space in India, and homegrown cab aggregator Ola is the market leader. Ola offers a wide range of services – ride-hailing, ride sharing, and bicycle sharing. Uber, the second-largest player in the market, offers similar services but has a smaller geographical footprint compared to Ola.

That apart, with regulatory hiccups showing signs of clearing up, bike sharing is gaining momentum across the country. With a fleet of 46,000 vehicles – 30,000 scooters and 16,000 bicycles – there are 20 participants providing such services across 14 cities.

Fighting for a Share of the Market

Together, 3.5 million rides (hailing and sharing) were recorded in 2018, a 20.6% increase from the previous year. Of this, 90% of the numbers were ride-hailing services provided by Ola and Uber. There are over 15 players in the ride sharing space in India. Interestingly, in the long-distance ride sharing space, BlaBlaCar is the leader. Within cities, Ola and Uber dominate the ride sharing market, by matching drivers and passengers in real-time.

The concept of car sharing was introduced to India by Zoomcar, way back in 2011. Today, the service is available across 46 cities. With a fleet spanning 19,700 vehicles, Zoomcar is a market leader in the space with a share of over 70%. It has the strongest network in the segment.

Future Outlook

Ride-hailing is the top trend in the transportation sector in India, as passengers can simply use their phone to hail a cab and pay for the ride. Over the last decade, over 30 participants have entered this market, offering some form of shared mobility service. The future outlook for shared mobility services remains strongly positive. In the long-term, services will expand and strengthen in tier-3 cities. Due to their ease of availability and convenience, there will be high customer acceptance for emerging business models in India by 2025, such as ride sharing, vehicle subscription, and bike sharing.

Scouting for Partners

Original Equipment Manufacturers (OEMs) are building partnerships to gain entry into the shared mobility market in India. Hyundai has secured a strong position in the market through its partnership with providers offering different services. In March 2019, Hyundai announced an investment of $300 million in Ola for electric vehicles and charging stations. In 2018, it pumped $14.3 million in the form of Series-B funding into self-drive car rental service Revv. It launched a vehicle subscription program with Revv in 2019.

Similarly, Indian automaker Mahindra and Mahindra has collaborated with Ola and Zoomcar, while Tata has forged an alliance with Myles to provide its Nano cars for self-driving. Honda has tied up with Drivezy to provide scooters for its platform in Bengaluru and Hyderabad.

Speed Breakers on the Road to Growth

Over the last few years, governments in India have been focused on developing public infrastructure. Metros and monorails have sprung up in many cities across the country. Compared to travelling by road, these are cheap and efficient alternatives. These services will continue to lure middle-class travelers, the major portion of the commuting population. This could limit the adoption of shared mobility.

That apart, Indian cities lack infrastructure for non-motorized transport, thereby limiting bicycle sharing opportunities. Although the government has been encouraging sales of electric vehicles, the lack of charging stations will hamper its adoption for shared mobility.

Bigger concerns in India have been about safety issues. Many companies in this space have lost business due to driver misconduct. Incidents of rape in Delhi and Mumbai are a cause for concern. Women commuters are more likely to choose public transport which, though crowded, is considered safer than cabs. As companies are taking steps to ensure women safety, the impact of this restraint may come down in the medium or long term.


Shared mobility is a high growth market in India. It is in the nascent stage and is expected to grow at a faster rate over the next few years. The market will witness increased ridership across all major services being offered.

Companies are focusing on promoting ride sharing services. Further, the advantage of reduced cost and comfortable rides have led to an increased adoption of ride sharing services, particularly among the working population, who use it for daily commuting. A large number of small players in the ride sharing market offer corporate ride sharing solutions.

By 2025, shared mobility will emerge as a major means of transportation across India, and the country will witness substantial decline in adoption rate of personal mobility means. The total shared mobility fleet in India is expected to reach 4.6 million vehicles by then.

For more information on the Strategic Assessment of Shared Mobility Market in India, 2019, please write to Bakar Sadik Agwan, Research Analyst – Mobility, at bakar.agwan@frost.com

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