- A ‘natural balance point’ may have been in the local transport market, as rideshare growth slumps to its lowest on record.
- Rideshare comapanies like Uber, Ola, and DiDi only grew by 3% in New South Wales last year, according to the Independent Pricing and Regulatory Tribunal, compared to 12% the year prior.
- While noting it would take future results to be sure, the Tribunal suggested “the period of constant growth may be coming to an end”.
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The meteoric rise of Uber may be over – or at least, on pause.
Having conquered the Australian market in just a few short years and driven countless taxis out of business, the rideshare market appears to have reached a new normal in one of its largest states.
According to the Independent Pricing and Regulatory Tribunal’s annual survey, New South Wales found a “natural balance point” in 2019, with ride share companies growing by just 3% instead of 12% in the previous year.
“After a steady rate of growth observed across both survey methods from 2014 to 2018, the 2019 data shows a plateauing of ride-share use at about the same level as use of taxis,” the tribunal noted in its 3,000 person survey. “Taken together, these indicators don’t suggest that ride-share will diminish in the marketplace at all, but do suggest the period of constant growth may be coming to an end.”
It’s the first time in years that rideshare companies haven’t posted double-digit growth, with the report suggesting the market could now be entering a new mature phase.
The survey also suggests reports of the death of taxis have been greatly exaggerated. While Uber, Ola, DiDi and others have certainly upturned the sector, cabs appear to be hanging on just fine, with 49% of Sydneysiders surveyed reporting have ridden in one in the last six months.
Indeed, outside of Sydney, taxis retain a stronger footing. In urban areas like Newcastle, Wollongong, Gosford and Wyong, rideshare is yet to get a 30% share of the market. Taxi drivers meanwhile improved their tarnished image in 2019, with people rating them more highly than Uber when it came to safety, navigation and driver skills.
Customers maintain however that rideshare services are superior when it comes to availability, value and waiting times, with Uber remaining more popular than taxis. Value appears to still be the major distinction between the services with four in ten people saying they’d use cabs if they were cheaper.
Interestingly though, satisfaction with cab fares have steadily improved over the last five years, suggesting the price differential between taxis and the likes of Uber is narrowing.
With Uber and other rideshare companies being notoriously unprofitable as they jostle for market share, question marks remain over how much longer they can run at a loss.
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