Monday, 29 April 2019 10:45

Uber takes business from taxis as market growth accelerates: report Featured

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Uber has achieved strong growth in the Australian market in six years of operation, with nearly 4.3 million people aged 14+ now travelling in an average three months, as the the ride-sharing service continues to take marketshare from taxis.

According to the latest research from Roy Morgan Research, conducted in the year to December 2018, Uber has established itself as Australia’s leading ride-share app, with the 4.3 million users — or 20% of the population — up from just over two million (10.2%) in 2016.

And, according to the report, travelling by Uber increased substantially in all five mainland states over the last two years, while usage of taxis declined over the same period.

Uber’s encroachment on the demand for taxis across Australia continues to increase, with the number of Australians who travel by taxi in an average three months falling by nearly two percentage points over the last two years to 21.5% in 2018, the report reveals.

Uber’s growth over the last two years was most notable in South Australia and New South Wales, rising by 12.2% points and 11.3% points respectively, and with South Australia accrediting Uber later than most states, their demand is now catching up to the rest of the nation.

Growth of Ubers by age group (Dec 2016 vs Dec 2018)

uber one

The largest slumps in usage of taxis were seen in Queensland and Western Australia, both falling by 3.7% points while usage of taxis dropped by a smaller 1.1% points in Victoria and was down by 1% point in New South Wales compared to two years ago.

The research reveals that there has been strong growth in Uber usage across all age groups, ranging from growth of 73% to 1,190,000 for 25-34-year-olds to as high as a massive 253% to 197,000 for 14-17-year-olds.

In the year ended December 2016, only 56,000 14-17-year-olds rode in an Uber, equal to 4.9% of that age bracket.

However, the report says that in the year ended December 2018, the number of 14-17-year-olds riding in an Uber had grown to 17.1% of the age bracket (197,000).

Taxi and Uber use by state (December 2016 vs December 2018)

uber2

There was also strong growth for 35-49-year-olds, experiencing a 142% increase in using an Uber to over 1.2 million which now makes this age bracket the largest users of Uber.

And, the number of Australians who travel by Uber in an average three months more than doubled in percentage terms over the last two years, up by 10.6% points to 20.8% in 2018.

Roy Morgan says that the success of Uber has not gone unnoticed by budding entrepreneurs and investors, and several competing services have begun operating in Australia.

According to Roy Morgan, while Uber has a headstart in the market, other rideshare companies such as Taxify (now Bolt), DiDi, Ola, GoCatch and others are all competing for the ever-growing segment of the population looking for someone to take them from point A to point B.

The latest Roy Morgan analysis reveals that 90,000 people across Australia already use a ride-share service other than Uber in an average three months without also using Uber in that same timeframe.

Success of Uber compared to new rideshare competitors (December 2018)

uber3

And Roy Morgan says new entrant Taxify (Bolt), headquartered in Estonia, is a leading competitor, with 112,000 Australians (0.5% of the population 14+) using their service at least once in an average three months in 2018.

“Uber has enjoyed global success in connecting drivers and passengers at an affordable rate, and Australia’s market is no different. A staggering 20.8% of Australians 14+ now rise in an Uber in an average three months, up from 10.2% two years prior,” said Roy Morgan chief executive Michele Levine.

“The 35-49-year-old age group are now the biggest users of the rideshare service, while 14-17 year olds are the fastest growing, indicating that parents are now comfortable enough with the safety and security of Uber to allow their children to try it out.

“Across the various states, Western Australia remains the state with the highest Uber adoption (25.7%) and the largest decline in taxi use over the last two years by 3.7% points to 19.6%. In fact, in Victoria, Queensland and Western Australia usage of Uber now exceeds usage of taxis.

“In contrast to the other largest states, people in NSW have remained the most loyal to their taxi services, with the highest proportion of residents using a taxi in an average three months (24.3%), though this figure is still a percentage point lower than the same time two years ago.

“However, there are now many new companies from all across the world looking to replicate Uber’s success, and they have already started to influence the Australian market. Taxify, now known as Bolt, is now used by over 100,000 Australians in an average three months, while a collection of other rideshare services are now used by 219,000 Australians in an average three months, accounting for over 1% of the 14+ Australian population.”

Levine says that, in total, there were 90,000 Australians who now use a non-Uber ride-share service at least once in an average three months who do not use Uber at all.

“While Uber comfortably sits at a phenomenal domestic market share, the sudden growth of these new competitors cannot be ignored, and Uber would do well to reconsider where their unique value propositions are," she said.

“At the same time, Uber’s competitors will need to be creative when tackling the industry giant, while also making themselves the preferred options to taxis and other rideshare services as well. To gain the competitive edge that only deep market research can provide, speak to Roy Morgan for a better understanding of your market.”

Graphics: courtesy Roy Morgan

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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