A wave of on-demand, shared and electric-powered urban transportation services will generate $660 billion in revenues globally by 2030, according to a new study by The Oliver Wyman Forum and the Institute of Transportation Studies (ITS) at the University of California.
New urban mobility options growing twice the rate of conventional public transport
Over a dozen new urban mobility options studied by the researchers represent a $260 billion market currently and include ride sharing, e-scooters, electric-vehicle (EV) charging stations, and smart parking apps. Revenue will grow 10% annually during the decade, versus 5% growth expected for cars and conventional public transportation. Researchers noted that emerging mobility services have the potential to reshape urban and suburban travel, benefitting climate and social sustainability.
The global study analyzed commercial prospects for 13 transport modes and mobility services across North America, Europe, and Asia. Results include:
- Smart-parking services will grow 34% to reach $32 billion in 2030, with North America capturing the largest share, where the currently fragmented market is expected to consolidate through mergers and acquisitions.
- EV charging services are expected to expand about 35% a year globally to $12 billion by 2030. Europe will see the highest growth due to government-funded incentives and mandates against the sale of gasoline or diesel-powered cars.
- Electric scooter sharing will rise by 23% annually, generating $7 billion in revenues by 2030. Dockless models, first introduced in the U.S., have already overtaken bike sharing. California and its urban areas are leading the market acceptance, thanks to residents who adopt new technology early and state policies to reduce emissions.
- Car sharing is challenging public transit in Europe, where the market is expected to grow from $3.0 billion in 2020 to $6.9 billion in 2025 and $9.6 billion by 2030. In Germany, 25.5% more drivers registered with car sharing services in 2021 than in 2020, as people looked for alternatives to public transportation during the pandemic. About a fifth of public transport users say they will continue to avoid to public transport.
- Asia is by far the biggest market for ride-hailing and taxis, accounting for 60% of the global total and 80% of the region’s total consumer spending, will see growth accelerate from $103.7 billion in 2020, to $171.9 billion in 2025 and $230.0 billion in 2030.
Dirty engine bans vs. conflicting demand
Industry growth will be driven by regulation, primarily at the local level, the report noted. Cities around the world are increasingly imposing restrictions on older, dirtier vehicles. That trend may lead to outright bans on all gasoline and diesel engines.
Meanwhile, consumer demand is still evolving, with seemingly contradictory preferences for inexpensive but on-demand services.
Local authorities will have to decide how much to fund mass transit versus bike lanes or car parking. At all levels of government, technological progress will often outpace regulation…one reason that many cities have adopted public-private partnerships as a means of collaboration.Andreas Nienhaus, Partner at Oliver Wyman
New mobility players will struggle to make a profit as they try to deliver inexpensive, individualized and on-demand services.Andreas Nienhaus, Partner at Oliver Wyman