Ask two random people how they got to the bar tonight, and you’ll get proof that ride-hailing giant Uber is giving just about everyone a run for their money. According to statistics released by expense report company Certify, North Americans are now significantly more likely to use Uber to get around than calling a taxi or renting a car. Over the summer, Certify processed 10 million ground transportation receipts, 48% of which were for Uber rides. If this is an accurate picture of transportation trends, then there’s practically a 1 in 2 chance your next paid car ride will be with Uber.
Fortune reports that this is major growth for the company from the previous summer, when Uber made up 31% of the receipts processed by Certify. Although the numbers were lower last year, Uber’s performance still outshined taxis, which accounted for only 22% of rides, and direct competition Lyft, which gathered only 3% of the pile. While there is still a healthy market for rental cars for longer, multi-day trips, and the limo remains our go-to for special occasions, taxis’ everyday business is suffering because of Uber’s popularity. Now operating on every continent except Antarctica, Uber’s growth seems unstoppable.
One major reason for the company’s success is that its drivers charge lower rates than taxicabs. But there are other positive aspects to choosing Uber: the app opens two-way communication between the driver and customer, and thanks to the review-based rating system, users know which drivers to call and which ones to avoid. In short, the service has all the convenience of a taxi, with the added benefit of knowing what you’re getting- and not having to stand in the rain on your night off, praying that the taxi you called doesn’t pick up a bigger fare before it gets to you. Uber is successful not just because it’s cheaper, but because it’s filling a gap in transportation options, particularly in cities where public transport services are not always reliable.
But as Uber’s reach extends further across borders, it faces constant opposition from local taxi drivers and government bodies. Courts in Frankfurt, Germany have recently decided to uphold a ban on Uber, and it’s also been banned in some Canadian cities, reports Journalist’s Resource. Clearly, in order to function properly, Uber must be proactive in working with lawmakers to make sure the service is accepted locally. Direct competitor Lyft may have a significantly smaller piece of the pie, but it has been adamant about negotiating with governments to ease the service’s transition into the local transportation mix. With this effort, Lyft’s service has gained a firm foothold in major cities across the U.S. Business Insider reports that Lyft’s market share has grown by 70% since 2015 in the 20 top cities across America. This is still small potatoes next to Uber, which now has more than 40 million monthly active riders globally, according to CEO Travis Kalanick. Fortune reports that the company paid out between $1.5 and $2 billion to drivers in September, and that the average monthly spending per rider is $50.
Each year, billions of dollars pass through the sharing economy into people’s pockets via mega-sharing companies like Uber. Critics say that this business model is just a way to get around local labor laws, while supporters insist it provides people with gainful employment. Whatever you believe, there is no denying that Uber’s success is part of a larger pattern signaling a shift in how business is conducted today. And as the numbers continue to change in Uber’s favor each quarter, more businesses are sure to get in on the action. Sharing is caring- but it’s also a dynamite business model.