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As the World Drives on to Ride Sharing, Israel Marches Backwards

By preventing Uber to operate in Israel, the country is walking away from more efficient and cooperative transportation
Traffic on a Tel Aviv highway. (Craig Johnson)
Traffic on a Tel Aviv highway. (Craig Johnson)

Modern transportation is constantly evolving, and one of the most significant developments in the technological revolution of transportation has been the widespread use of ride sharing apps. According to some estimates, growth in this sector will continue to climb and will generate a projected of revenue $335 billion by the year 2025. How is it possible that even as less developed countries are joining the sharing economy trend, Israel, known around the world for its technological innovation, is not doing the same?

By preventing Uber’s ability to operate in Israel, the country is walking away from the worldwide trend that has transportation becoming more efficient and cooperative.  In a ruling against Uber, the court sealed Israel’s fate — our citizens will continue to pay more for public transportation than people in far less technologically-advanced countries.

The popularity of ride-sharing apps has transformed the way business functions across industries and yet, it seems as though the potential power of the sharing economy has not been realized. The first Israeli apps developed for the transportation world, like Gett and Moovit, eliminated the long wait for the bus and the need to physically hail a cab. Between them, these two apps have millions of users. Moovit is popular among more than 60 million users around the world and announces the addition of another city’s transportation route to its offerings every 18 hours.

Later, additional solutions to existing apps that became available in Israel were aimed at making transportation not only more convenient, but more affordable.  Uber and Waze Carpool were designed to share the costs of fuel, split the cost of a ride, and allow users to profit from car ownership. In the case of these features, an emphasis on affordability and profit acted as the catalyst for their rise in the app’s popularity. According to research, these apps have succeeded in reducing the cost of transportation between 25% to 50%.  The popularity of these apps has transcended borders, today they are available in hundreds of cities around the world.

Why Bus, When You Can Uber?

Ride sharing apps are much more reliable than public transportation, which has led to behavioral changes and a trend of moving from public to ‘sharing’ transportation has become evident. This shift is also impacting the automotive industry. A survey of US residents aged 17-64 found that 22% of respondents decided not to buy a car following their use of Uber. An estimated 3-4 million less vehicles were sold in the US this year, a chunk for a market that typically sells 15-20 million cars each year.

A new breed of apps that are walking the line between public transportation and private rides are surfacing. As the popularity of the transportation sharing economy grows around the world, the number of apps offering transportation solutions and multi-solution apps are rising. Via, for example, has developed group rides for taxis. Via offers a solution that allows five passengers to book the same cab ride –  increasing the high operational efficiency and profitability of each cab. At Webpals, we have seen the trend of ride sharing apps expand eastward and include more and more vehicles.

Ride Sharing Around the World

In developing countries, the sharing market economy has taken a slightly different direction. Apps like Indonesia’s Go Jek, for motorcycle sharing and other alternative models of transportation are taking off. Just last month, Go Jek raised more than half a billion dollars to expand the bike sharing service in Indonesia, and it is expected to expand into additional countries.

Popular bicycle sharing apps have been successful in a variety of regions in Asia. The first of these apps (oBike, Mobike, ofo) appeared in China.  Unlike in other instances, this scenario had apps launch in the east and spread westward. These are Asian companies successfully launching products in the Western world and gradually making their activity global.

The sharing economy model is transforming the lives of billions of people around the world and changing consumer behavior in the world of tourism, commerce and transportation. There is no doubt that this has become a phenomenon and the continued growth depends on a number of factors. Technology, marketing, local laws and infrastructure, payment methods, and government support, to name a few. Only once the obstacle of regulation has been hurtled, will a traffic-jammed Israel enjoy the fruits of the ride sharing trend, as billions of people already do around the world.

About the Author
Equipped with close to 15 years of experience in the online marketing industry, Inbal Lavi has been the CEO of Webpals Group, the world’s fastest-growing performance marketing company, since January 2014. Inbal has worked tirelessly to close the gender gap in her field, leading a company in which half of the 400-person workforce and c-suite are women. As Webpals Group’s CEO, Inbal has successfully led multiple multi-million-dollar M&As, including all three of Webpals’ major acquisitions: Dau-Up, MarMar Media and ClicksMob, as well as additional website acquisitions. She holds a B.Sc. and an M.Sc. with honors in Industrial Engineering from Tel Aviv University.
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