What if tomorrow when you wake up you need to mount a horse to go to work? Can you imagine a world where cars are a luxury just for the few and the vast majority of people need to walk even for hours so as to make it on time for work? Surely, what described above seems far-fetched and a blast from the long past. At the same time though, we should not neglect to mention that the last decade has been the most impactful on the way we move around daily.
October 31st is a special day for us here at Beat. We exist to build technology for a better urban life and we celebrate World Cities Day as yet another occasion to lean over our communities and push forward any type of cooperation that contributes towards sustainable urban development.
The ride-hailing revolution
Emergence of advanced technology has certainly benefited the world to a great extent. Think about it! Can you come across any area where technology has not shown its flair? If you are still thinking about it, it’s because there is hardly any. Ride-hailing industry can be defined as a contemporary way of availing a private taxi for easy conveyance. Gone are those days when the taxi driver had to stop at several junctions to pick up one or more passengers or passengers having to stand at the bus depot waiting relentlessly just for a single ride. Improving the overall experience for customers has been the major focus for ride-hailing companies during the last years.
Today, North America is the highest contributor to the global market of ride-hailing, followed by Asia-Pacific. In 2017, the global ride-hailing service market was valued at $36,450.0 million. It is projected to increase to $126,521.2 million by 2025, registering a Compound Annual Growth Rate (CAGR) of 16.5% from 2018 to 2025.
The Latin America challenge
To be able to understand the context of the evolution of transportation in Latin America, it is necessary to understand the current situation of the continent. Latin America has had a great population growth in the last decades, associated with an intense and uncontrolled urbanization process. Between 1995 and 2009, the total population has passed from 472 to 575 million people which translates to a 20% increase in only 15 years.
According to UN data, there are in Latin America more than 30 urban areas with more than 2 million inhabitants, and there are megacities like São Paulo (21 million), Mexico City (20 million), Buenos Aires (15 million), Rio de Janeiro, Lima or Bogota (around 10 million each).
Latin America is amongst the most urbanized regions in the world, with 80% of the population living in large cities. It is expected that by 2025, 90% of the population will be urbanized.
The need for transportation solutions was and still is present, real and essential. Better urban mobility improves the quality of life of the citizens of these cities by improving the quantity and quality of reachable job opportunities for individuals, facilitating the dissemination of ideas between areas that did not previously have a physical connection.
Unlike many countries in Europe and other regions of the world, Latin America is very much tied to traditional transportation such as buses, trains, and metro systems. Owning a car is also quite important for most individuals as it is seen by many as a prestigious asset.
However, in the last three years or so, Latin America has slowly been changing and the trend is expected to continue on into the future. Many young commuters are putting less importance on owning a car and opting instead for on-demand transportation services such as ride-hailing, which is currently among the fastest growing of new mobility business models, and it is expected to offer billion dollar market potential by 2025.
As many large cities (São Paulo, Mexico City, Bogota) do not have the condition to sufficiently transport commuters to and from work, their collective transportation systems often operate above capacity during peak times, making commute time quite uncomfortable.
Latin America is one of the most urbanized regions in the world. It is home to more than 649 million people and close to 83% of the population is urban. It is estimated that Latin America’s cities will grow to 711 million in the next decade. The one common facet faced is the speed and scale of modern urbanization and the inability for urban planning to grow at the same pace.
When it comes to traffic the situation is consequently challenging. It is often argued that around 30% of the traffic in large urban cities consists of frustrated drivers circling and looking around for an elusive parking lot. Many can relate! For example, Mexico City is ranked as one of the most congested cities in the world with journeys taking on average 66% longer and traffic gridlock adding 227 frustrating hours of travel time to the annual life of a typical commuter.
As the demand for more sustainable alternatives of transport meet the advancements in technology, Latin America’s culture of traditional urban mobility and landscape gradually faces a massive change with more options provided to get you from point A to point B.
“Every ride is an experience, unlocking the endless possibilities of each city.”
RIDE-SHARING: The future in Latin America
According to statistics portal Statista, ride sharing revenue is expected to surpass US$1 billion by 2023 nearly four times the US$518 million seen in 2018. Revenue is expected to show an annual growth rate of 16.6% resulting in a market volume of US$16,459 million by 2023.
One factor triggering this demand is the desire for rider safety. Transport safety in Latin America is a known hazard that commuters turn to ride sharing services for safety reasons with ride sharing marketplaces providing features such as price transparency and GPS tracking. Millennials being currently a quarter of the Latin American population, choosing to use alternative modes of transportation leads to a growing number of smartphone use. Did you know that Latin America is the world’s second fastest growing mobile market?
By 2025, it is estimated Latin America will see about 484 million smartphone users with access to ecommerce mobile app-based services making the sub-continent “open for business” and a new commercial hotspot amongst online ride-sharing marketplace platforms. Moving into a future in which all types of needs and services can be taken care of at a tap of a button, Beat has been changing Latin America’s urban mobility since 2014. We pride our deep knowledge of the needs of the region with the unique hyperlocal approach we have been following. Cities are our home. We get inspired by the uniqueness of each urban landscape and their people.