Taxi Business

[Market & Trend Analysis] How to Launch a Ride-hailing Business in the Oceania Region?

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It has been a little over a decade ever since Uber unveiled its first app-based taxi booking system in San Francisco. Within a short span of time, the industry has grown in every possible dimension. The same business model has been replicated across multiple service verticals. Today, almost every service is available through an on-demand mobile app. The spectrum of services includes but is not limited to food delivery, grocery delivery, handyman services, babysitting, dog walking, and even dating.

When it comes to geographical spread, app-based taxi booking has spread into almost every country. Even within the United States, Uber has its own share of competition. In places like Singapore and China, Uber was not able to withstand the competition DiDi and Grab, in that order, and ended up on a business-compromise where they purchased shares from the company that dominated the market. In a population-rich place like India, they have merged their operations with their biggest competitor cola.

Just like its landscape and its share of menacingly venomous creatures, the marketing landscape of Oceania, comprising of Australia New Zealand, Papua New Guinea, Vanuatu, Samoa, Kiribati, Nauru, Solomon Islands, and Micronesia Tonga It’s quite different than the rest of the world.

As it can easily be inferred, Australia and New Zealand dominate the marketing and revenue spread across Oceania. Let us look at this lucrative territory, the promises, and the challenges that they pose.

The global market

Before we dive into the specifics of Australia, let us look at the global marketing landscape. The overall revenue from the ride-hailing segment is expected to skyrocket to $1.8 billion in the year 2020. With the expected annual growth rate close to 15% for the next five years, it is expected that the market volume by 2025 will stand at a staggering $3.7 billion. Launch a ride-hailing app in this ever-growing market with the help of ready-made solutions.

Focusing down under

As many of you may have known, Australia is a conglomeration of a vast desert bordered by a few big cities that lay on its coast. Cities like Melbourne, Sydney, Perth, and Canberra happy quick to embrace technology. It can be best absorbed in the growing demand for new-age ride-hailing services including but not limited to digital payments, GPS in vehicles, and electronic meters for fares.

There have been a lot of new taxi booking apps that have made their inroads in Australia. Some of them have already established an international presence and some of them focus solely on the Australian market.

88% of the total Australian population has access to the Internet. Australia is soon approaching the 100% Internet penetration mark. Surveys have revealed that people in big Australian cities prefer to commute using ride-sharing platforms which will ensure that they reach the nearest transport hub at five Australian dollars flat.

Needless to say and as you may have expected, New South Wales dominates the Australian market. The state had over 6992 taxi licenses out of the 5572 that were issued in the city of Sydney alone. It is also a major tourist hub that contributes to its business.

The COVID-19 pandemic was an unexpected blow to the growth of the taxi business. It is, however, expected to be a temporary setback and the extra care that people will have in terms of ensuring their privacy and minimizing contact will only contribute to the growth of the ride-hailing spectrum in the near future.

The household names

For a long time, Uber dominated the Australian market. Although they still hold their supreme position, their dominance is being challenged by a lot of new players, especially DiDi and Ola.

DiDi from China and Ola from India have contributed to 14% and 20% in that order. In addition, there are a lot of small players like Bolt, Sheba, GoCatch, Shofer, and Rydo. All these commands combined together, only hold about 10% of the market. It is to be remembered that people who use any other app that Uber have been users of Uber at some point in time because there was a phase when taxi booking was synonymous with Uber in Australia. There is a massive overlap even today. 84% of DiDi users and 92% of Ola users have also been using Uber.

Needless to say, Uber lacks high above the rest of its competitors when it comes to customer satisfaction. Uber has a customer satisfaction level of 88% and the second one, DiDi has only 75% positive ratings.

The New Zealand market

The New Zealand market is not very different from its adjacent big brother. It is just that the list of competitors is a bit different. Hoover and Ola have a prominent presence in both Australia and New Zealand, and Huber is the undeniable market leader. It has more than 300,000 active users and 4000 drivers in the country.

App-based taxi booking services have received support from the government and even they believe that such services are reliable, cost-efficient, and safe. It has also contributed to generating employment and earning opportunities for many unemployed citizens.

The overall revenue from the ride-hailing segment in New Zealand was at about $225 million in 2020. With a projected annual growth rate of about 14.3% in the next five years, the market volume is expected to be at about $439 million by 2025. What makes this stat more impressive is that the music penetration rate is set to grow to 19.2% in 2025 from its current value of 18.4%. The average revenue per user [ARPU] is projected to be at a whopping $252.

In addition to Uber and Ola, the other players in New Zealand are Zoomy, iHail, and Green Cabs. Just like Australia, the New Zealand market is expected to be dominated by a few cities like Auckland, Wellington, and Christchurch.

Focusing on the brands

The market of Oceania is similar to the global market but it is the meticulous understanding of the differences that distinguish the successful from the mediocre. 

Being the global leader, Uber has dominated the market with about 92% of market share in Australia and 65% of market share in New Zealand. What makes the positioning of Uber interesting and not worry is that there are about 4.4 million users in Australia which accounts for about 21.5% of the total population.

Ola, for a long time, focused only on the market of the country in which it was incepted – India. It commenced its operations in Australia and New Zealand only in 2018 and has been steadily growing ever since. It is operational and all the major cities of Australia and New Zealand. The spokesperson of Ola has reported that the app has been downloaded more than 350,000 times, and the company is all set to launch its services in 11 new locations spread across Australia and New Zealand, taking the total tally to 33 cities in the region.

DiDi was responsible for the exit of Uber from China. This Chinese company started its operations in Melbourne in 2018, and later expanded into all the cities in which India is operational. It has quite a strong presence in the Asian market and all across the world with about 550 million users and 31 million drivers. In Australia, DiDi has over 2 million customers, and although it might not enjoy patronage like Ola, it still boasts of a higher customer satisfaction rate.

There are a few other brands that have made their flickers here and there. Zoomy, for example, is New Zealand’s own creation which has about 2300 drivers across the country. They have been clear in their focus of not being discount oriented in pursuit of winning customers because it might not, according to Zoomy, be sustainable in the long term. 

Shebah, the Australian taxi service is a solution exclusively created for women and it has women drivers handling the rights. Only women or men with kids are allowed to take these services, and men are not allowed to occupy the shotgun.

Conclusion

What the Oceania market lacks in terms of numbers, it makes it up for in terms of its diversity. This means that the possibilities of exploring new business opportunities in any business, even if it has established players, it’s possible in this market.

The same argument can be extended to the ride-hailing market. Services like Shebah show that if you can identify a specific segment and exclusively create an app for a specific audience, you are bound to achieve success. Let not your efforts to explore the market be wasted in building an app from scratch. If you would like to launch the ride-hailing app in Australia, you can make use of an Uber clone app.

A white label Uber clone app is easy to customize and it is available as a complete product off the shelf. All you need to do is get in touch with the company that specializes in the creation and customization of these Uber clones. They will take care to understand your requirement, customize it according to your business needs, and help you launch your product in the shortest possible time.

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