It must be tough to be a taxi driver today, seeing your business threatened by ridesharing companies like Uber and Lyft. But it’s not just a threat. A new study by Certify has documented a steep decline in taxi rides in the usually lucrative business-travel market. Rental car companies are losing business traveler patronage as well, according to Venture Beat.
The shift in business travel usage patterns has been dramatic during the past two years, which Certify documented by analyzing more than 10 million travel receipts and expense reports. In the second quarter of 2014, taxis provided 73.70 percent of business rides, Uber 25.96 percent, and Lyft was barely on the scoreboard at 0.34 percent. Just two years later, in the second quarter of 2016, Uber led the pack with 72.53 percent, followed by taxis at 22.27 percent, and Lyft with the greatest rate of increase but still the lowest market share at 5.20 percent. The headline here is that taxi use by business travelers took a 51-percent market share hit in just two years.
Taxis also lost out to both Uber and Lyft in user ratings and cost per ride. The users from Certify’s study in the second quarter of 2016 rated Lyft highest at 4.80, Uber at 4.71, and taxis at 3.75. In the same two-year period, ride-hail costs decreased for both companies but increased for taxis. Specifically, taxi ride costs increased by 15 percent from 2014 to $39.80 per ride, while dropping 15.5 percent for Uber to $25.48 per ride, and 7.7 percent to $20.78 for a ride with Lyft. So if you look at the two ridesharing companies against taxis, user ratings are higher and costs are lower with ridesharing — certainly reason enough for the usage shifts.
Rental-car companies share some of the same pain felt by taxis, according to the study. Again, Certify studied business travel expense reports for ground transportation over a two-year period, from the second quarter of 2014 to the second quarter of 2016. During that time period, rental car use dropped from 54.7 percent in 2014 to 37.3 percent in 2016. Taxi use dropped from 37.2 percent in 2014 to 14 percent in 2016. Uber and Lyft combined rose from the bottom position at 8.1 percent aggregate use in 2014 to the leading 48.7 percent in 2016.
If ever there was a clear indicator of market disruption, Uber, Lyft, and other ridesharing companies have demonstrated clear and significant disruption of the taxi and rental-car industries in just two years.
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