- Mobility as a Service market set to hit $358.35 billion by 2025
- Ridesharing rental market estimated at 1.25 million drivers and growing
- 40 percent of aspiring drivers do not own a qualifying car
The growth of urban populations with money to spend on automobiles has made driving a nightmare in some cities. In 2010, for example, a massive traffic jam in China that snaked for 100 kilometers (60 mi) lasted for 5 days or longer. Traffic congestion in America’s big metropolises may never reach that scale but their frequency is just as disturbing. However, digitalization may present a way to avoid such horrible scenarios, says ‘Big Four’ accounting firm Deloitte. Referred to as Mobility as a Service (MaaS) when applied to transport, MaaS “relies on a digital platform that integrates end-to-end trip planning, booking, electronic ticketing, and payment services across all modes of transportation, public or private”, exactly what HyreCar Inc. (NASDAQ: HYRE) is offering. The tech company operates a web-based marketplace that allows car and fleet owners to rent their idle cars to Uber and Lyft drivers safely, securely and reliably. On Tuesday, December 11, 2018, company executives presented at the Maxim Group TMT Conference in New York City, introducing investors and others to the brave new world of MaaS (http://nnw.fm/nWZD3).
HyreCar may be in the right place at the right time. A recent report on the MaaS market identifies a number of factors, such as the increasing pressure on transportation infrastructure brought about by rapid urbanization, demand for one-stop seamless transportation solutions, and the proliferation of Original Equipment Manufacturers (OEMs), which are driving its growth. As a result, the MaaS market (http://nnw.fm/ewDJ1) “is expected to grow to $358.35 billion by 2025 from $38.76 billion in 2017.”
Rideshare is a large part of that market, amounting to $62.2 billion in 2018, according to Statista. It is poised for growth. “Goldman Sachs research expects 40 percent year over year revenue growth in ridesharing through 2030.” In the U.S., the sector is dominated by Uber and Lyft, whose platforms are used by millions of passengers and drivers. HyreCar is especially interested in those aspiring to become one of the latter, 40 percent of whom do not own a qualifying vehicle. The company’s platform allows car owners to rent their idle assets safely, securely and reliably to rideshare drivers who need a car. It’s a big market. In November, Uber, which has “74 percent of the overall market,” was fielding about one million drivers, which means that Lyft, with a 19 percent market share, may have another quarter-million or so (http://nnw.fm/hIf8Z).
HyreCar generates revenue by taking a fee from each rental processed on its platform and through insurance-related fees. Each rental is a transaction in which a driver leases a car from its owner. Drivers pay a daily, weekly or monthly rental rate, plus direct insurance costs and a 10 percent HyreCar fee. The owner of the car receives the rental rate minus a 15 percent HyreCar fee. The transaction structure below is typical.
- Weekly rental $200.00
- Direct Insurance $70.00
- HyreCar driver fee $20.00
- HyreCar gross billings $290.00
- Owner payment $170.00
- HyreCar revenue $120.00
Executives from HyreCar attended the Maxim Group TMT Conference in New York City on Tuesday, December 11, 2018. They hosted one-on-one meetings throughout the day. In July, the company debuted on Nasdaq, raising $12.6 million in an IPO. That cash will be crucial in building scale as the company rapidly gains traction across 50 states and the District of Columbia.
For more information, visit the company’s website at www.HyreCar.com
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