Transportation as a Service (TaaS) is quickly expanding and is often regarded as the transportation mode of the future. Car ownership rates will gradually drop as a result of TaaS. It enables people to be able to buy excursions, kilometers, or experiences instead of owning a car, and they will not have to maintain their own vehicle.
What is Transportation as a Service (TaaS)?
Having a car was once considered a sign of adulthood. It was both a symbol of freedom and a mode of transportation to and from work. This condition has been gradually improving over time. As cities have evolved, public transit has become more common. As a result of rising carbon dioxide levels, humanity is now looking for measures to mitigate climate change. One possible approach is TaaS. As a result of rising carbon dioxide levels, humanity is now looking for measures to mitigate climate change. One possible approach is TaaS.
TaaS is a new way of thinking. Rather than emphasizing car ownership, TaaS emphasizes vehicle rental and related practices. There are some ride services under TaaS, Uber and Lyft are both examples. This gives you the opportunity to hire a car when you don’t have one, and you need a ride.
Mobility as a Service (MaaS) is another name for TaaS. (MaaS). While TaaS may currently require an app like Uber and a human driver, this will not be the case in the future. According to Goldman Sachs, the first semi-autonomous vehicle will be commercially accessible in one to two years.
Because today’s autos waste so much time, TaaS is critical. Across the globe, the average automobile sits idle for 95% of the time. Idle time can be eliminated with connected automobiles and rideshares. Rather than having many people drive their automobiles to work every day, the same people might hire a car and avoid owning one.
TaaS vehicles will be available 24 hours a day in several places. While the average person only uses their automobile for roughly 4% of the time, a TaaS vehicle will be used for 10 times as many minutes every day. TaaS will function similarly to current public transit, but it will integrate commercial transportation companies into a gateway, similar to an app. People can then use the portal to reserve and pay for rides anytime they want.
You can expect to spend an average of $8,469 per year on your vehicle if you travel 15,000 miles per year. Automobile insurance, gas, maintenance charges, and car payments must all be paid. Automobile insurance, gas, maintenance charges, and car payments must all be paid. You might save hundreds or thousands of dollars per year by switching to TaaS.
Many people use TaaS to gain more free time in addition to saving money. You can work on something else if you don’t have to drive throughout your commute. When you get home, you can enjoy spending time with your family. During your ride, you can study a new language, read a book, or indulge in your favorite pastime.
A wide range of businesses has already implemented TaaS. Products are already delivered to homes across the country via DoorDash, GrubHub, Amazon Prime Delivery, and Postmates. You can also lease your personal automobile or find a vehicle to lease through WaiveCar or Turo. Getaround, Zipcar, and aGo are some of the other car rental companies that will enable you to borrow a vehicle whenever you need it. Ridesharing, GoNanny, Uber, Zimride, and Lyft, for example, provide ridesharing services.
What Are the Effects of Using Transportation as a Service?
Since the first car dealership opened its doors in 1898 in the United States, dealerships have followed a fairly conventional business model since that time. Many jurisdictions forced dealerships to act as a middleman to prevent vehicle manufacturers from competing with them. This entire business model may alter as a result of TaaS and self-driving cars. Manufacturers may eventually offer autos directly to consumers.
Consumers will only buy a vehicle for a short time if they do so at all. While there are other methods to deploy TaaS, one idea is for a self-driving car manufacturer such as Tesla or Google to own an entire fleet of self-driving cars. Now, the customer decides on how to pay; either per mile or per minute. Renting a car will become much cheaper as self-driving cars eliminate the need for a human driver.
There’d be less demand for parking lots if there’s a low demand for cars. Parking lots typically make money by renting out spaces by the hour, day, or month. People will not require parking lots if they pay for rides rather than owning automobiles.
Is it a good idea to invest in TaaS?
Self-driving car companies are expected to perform well. Other manufacturers may face difficulties as a result of fewer people purchasing automobiles. Furthermore, corporations who operate parking lots and garages will lose money. Many parking lots and garages in major cities may be sold and converted at some point.
TaaS is designed to take advantage of four major trends. It includes connectivity, the gig economy, and electric cars, in addition to environmental, social, and corporate governance (ESG) investing. As it extends into areas like drone delivery, freight, distribution, food delivery, and personal transportation, the TaaS industry will eventually become an $8 trillion market.
These patterns have already begun to emerge. Car sales have decreased as more people choose TaaS services. In 2020, global automobile sales will have decreased by 22%. Auto sales declined by 4% in 2019 even without the epidemic. Vehicle sales have been down for the first time in a decade.
What are the TaaS Stocks, and what do they do?
Uber (NYSE: UBER) and Lyft (Nasdaq: LYFT) have now turned the ride-hailing market on its head with TaaS. In fact, the value of long-desired taxi medallions in New York and other cities has plunged. And these two will benefit from TaaS’s ongoing expansion in the coming decades.
In the foreseeable future, both of these companies’ ride hailing sectors will be fully operational in 2021. Currently, roughly 21% of the population in the United States has gotten at least one dose of the COVID-19 vaccination. That’s greater than the number of people who have been afflicted with the deadly virus. In addition, the number of new cases is steadily decreasing across the country.
These businesses, however, are not on an equal footing. Lyft’s revenue is expected to increase by 29.7% to $3.07 billion in 2021, before increasing by more than 41% to $4.33 billion in 2022.
Uber’s revenue is predicted to rise 45.8% to $16.24 billion in 2021, mainly to Uber Eats and its recent acquisition of Drizly, and then rise 37.5 percent to $22.32 billion in 2022.
Uber is the more dominant force in the American ride-sharing market. It presently commands 68 percent of the market, with Lyft holding the remaining 3 percent.
What’s amazing is that only a small percentage of consumers use both. This is a fascinating piece of information. Many Americans, after all, rely on Netflix, Hulu, Disney+, and Amazon Prime Video subscriptions. However, barely 10% of consumers use both Uber and Lyft when it comes to ride-sharing.
Companies to Keep an Eye on in the TaaS Industry.
But there’s a new disruptor on the horizon. Joby Aviation aspires to bring some of this sci-fi fantasy to the commuters of the world. The business has spent the last ten years developing a zero-emission, all-electric vertical takeoff and landing (eVTOL) aircraft that can bypass traffic jams.
Each plane will transport one pilot and four passengers on trips ranging from 5 to 150 miles at a top speed of 200 miles per hour. The cabs of the future will look like this. After Uber and Lyft, this is the next step in ride-hailing evolution. In reality, Uber was developing this concept before selling it to Joby in December. It also promised to spend $75 million on the business.
Toyota (NYSE: TM) also backed Joby’s eVTOL taxi project with a $394 million investment. The company’s goal is to save 1 billion people an hour of daily commuting time while remaining ecologically benign.
Joby hopes to start flying commercial passenger planes as early as 2024. And once these are up and running, the company’s revenue will skyrocket.
By 2025, the company expects to generate $721 million in revenue. It is expected that by 2026, that number would have more than doubled. With around 850 plans in service, the business estimates that each aircraft will generate $2.2 million in annual revenue.
Joby expects to have around 14,000 automobiles and $20 billion in sales over the next ten years. It plans to open offices in at least 20 places around the world, with recurring revenue from its aviation business accounting for more than half of its yearly sales.
These are ambitious predictions. Joby, on the other hand, is a step ahead of its competition. Joby will go public through a combination with Reinvent Technology Partners, a special purpose acquisition company (SPAC) (NYSE: RTP).
The corporation is valued at $6.6 billion in this purchase. Given the lack of actual money, that seems excessive. However, the market for air mobility in the United States is estimated to be worth more than $500 billion. This potential is expected to be worth more than $1 trillion globally.
TaaS isn’t just the future of transportation; it’s also one of the market’s most powerful forces right now. However, it will swiftly evolve during the next few years.