Skift Take
While ridesharing has gained solid traction in corporate travel, the business model of traditional car services providing ground transportation to companies is still strong. What remains to be seen is whether car services will widely adopt more user-friendly interfaces for hailing cars on demand.
If all you did was read news reports and listen to the raves of fellow travelers, you would probably think that ridesharing services like Uber and Lyft are rapidly putting traditional car services out of business.
The reality, however, is more complicated.
The "Taxi & Limousine Services in the U.S." report from IBISWorld shows that luxury and sedan corporate car services account for 13.9 percent of the total ecosystem, while taxis account for about two-thirds of the market.
Car service use is on the rise in general, after losing ground to ridesharing services from 2012 to 2015, according to the report. Regardless, revenue and employees grew over the same time period when car services and taxi companies lost market share to ridesharing. It pegs the segment's revenue at $19.6 billion with a $1.7 billion profit, showing how expensive it is to run a car service company.
"Over the next five years, industry performance will continue to depend on rising corporate profit and consumer spending on domestic travel," states the report. "Ride-hailing apps will continue to represent the bulk of industry growth as they expand to new regions. However, IBISWorld expects greater
