Uber and Lyft began competition within the transportation market , however, the use of apps brought new companies into the spotlight. The numbers for taxi services in the last 10 years are surprising, although the pandemic filtered out the weakest. All those who managed to survive are now seeking to expand their niche, seeking to be world leaders.
According to Goldman Sachs, the sector will skyrocket to reach $285 billion in 2030. With the aim of increasing even more, since the Chinese company Didi has surpassed Uber. It is now rated the most valuable startup in the world, showing no signs of slowing down. Therefore, it now seeks to conquer the Latin American market, motivating the competition.
Latin America as a land of opportunities
America, according to statistics, is considered one of the most urbanized regions in the world. Providing homes to more than 649 million people, of which around 83% live in urban areas. It has been predicted that this number will grow by 716 million, implying the need for transportation services and the expansion of real estate parking.
Large cities, such as Mexico City, Sao Paulo and Bogotá, can no longer support more vehicles. There are even metro areas operating above their maximum capacity. Which makes having a vehicle to get around more of a hassle than a luxury. This is why many users give up buying cars in search of better transportation alternatives.
Trends in the Latin American transportation market
Millennials as a sector constitute a quarter of the total population of Latin America. They are looking to quickly adopt access to alternative means of transportation and online services instead of purchasing a car. It should also be noted that they are part of the second fastest growing mobile market in the world.
We already mentioned the number of inhabitants that filled the continent, it is estimated that they will be prepared for digitalization. Since around 73% of the total population will have access to smart devices. As well as the willingness to adopt alternative solutions due to the absence of an accessible and efficient public transportation market .
The potential of ridesharing
Because of the promise that Latin America has become for the taxi business, ride sharing is expected to be a success. According to Statista, one billion dollars will be generated by 2023, which would be almost four times the amount recorded in 2018.
A major factor that has triggered the demand for ride-sharing is safety. Those migrating to these services are looking for features like GPS tracking and price transparency. In cities like Sao Paulo-Brazil, they already offer the possibility of sharing transportation only for women, who are usually at risk.
Who has already taken their place in America?
As we already mentioned at the beginning, Didi Chuxing is one of the most famous companies in the transportation market . It was founded in Beijing, China and is known for its ride-sharing app that matches customers with nearby local drivers. The company also provides rental vehicles, chauffeur services, shared taxis and minibus.
Didi managed to overtake Uber in China to claim its dominance in Asia. So it is planning its international expansion as the next step. Currently, it already operates in Mexico, Brazil, plus the recent Panama, and they also have their sights set on soon covering Colombia and Chile. Just like Didi there are other companies, let's see a little about them and their approach.
Uber's entry
Uber took its step into Latin America in 2013 and already has approximately 36 million active users. Mexico was a big success, as it became its second most productive country after the US. Uber practically had a ride-sharing monopoly in Mexico, but now has operations in more than 16 Latin countries.
However, the last few years have not been so good for Uber, due to the appearance of Didi. The first strike occurred in Colombia, when he failed to get the government to forgive him a ruling for unfair competition. This occurred after the judge of the sector regulator considered that the Uber app had violated competition rules.
Easy Taxis as an old competitor
Easy taxis started in Latin America in 2011, long before the big Uber. Rocket Internet supports this taxi booking service and Maxi Mobility has owned it since 2017 when Rocket sold it. Maxi Mobility may sound familiar and it is because it also owns Cabify, which operates in countries such as Peru, Panama, Bolivia, Argentina, Brazil and Chile.
Already in 2015 before being purchased, Easy Taxi merged with Tappsi, a Colombian taxi booking application. This was the decisive step to consolidate its position in the region. You may not have heard of them but they have impressive traction, having raised more than $75 million. However, the company is likely to be acquired by giants such as Didi, Uber or Softbank.
The Latin sector as a target
You will have been able to appreciate that this article is an analysis of the ride-sharing and taxi service in Latin America. Since it was discovered that this region has great potential when it comes to this type of business. Market trends across devices in the region show how big and lucrative the opportunity is for companies.
We thought it was vital to talk a little about the current greats who are competing to emerge as leaders. If you are also part of the transportation market or want to be, you should consider Latin America without a doubt. The numbers and statistics speak for themselves, so it is the right investment time for you.
