Presented by Beat
In 2019, the ride-hailing market was valued at 73.07 billion, and expected to reach $209.60 billion by 2025. Worldwide, Uber still dominates, but innovative startups are disrupting the industry, as they steadily chip into its market share. In America, ride-hailing companies Waze, Carma, and eRideShare are pushing their local advantage. In Europe, French BlaBlaCar has 40 million members worldwide. More than 500,000 in the U.K. have signed up for Liftshare.
And now Latin America is emerging as a major market, with tech-first ride-hailing companies like Beat taking advantage of a growing demand for affordable, flexible transportation.
The growing LatAm ride-hailing market
Latin America is the second-fastest growing mobile market in the world – 73% of the population has smartphones, and the number is growing rapidly. With expanded access to mobile internet, especially in burgeoning urban areas, the demand for ride-hailing apps is swelling. They’re especially attractive because companies offer safety and transparency with innovative real-time tracking, in-app navigation tools, and price monitoring.
Uber is competing with localized startups across Latin America. The technology and ride-hailing company Beat is growing in five markets across the region, beating out Uber in markets like Peru and Colombia to become the number one ride-hailing app, and has gained a foothold in Mexico.
Adapting to COVID-19
Unsurprisingly, the pandemic hit the ride-hailing market hard across the Latin American market. Rush hour has become a thing of the past, as more of the population shifts to working from home, and after-work ride-hailing has dropped precipitously with the decrease in public social gatherings.
“Every ride-hailing company was impacted similarly across the board,” says Sanja Ilic, COO at Beat. “There was a drop of 60 to 70% after the first wave of recovery.”
And along with the decline in demand has come a decline on the supply side, too. Fewer drivers are available now due to pandemic fears, despite the rigorous safety measures the company employs.
But despite the loss of business across their regular avenues, Beat has been able to pivot in the communities they serve to offer essential services and communication.
“When there is a challenge, there’s always an opportunity,” Ilic says.
When Beat’s regular services had to be temporarily disabled following the State of Emergency, the company launched the reduced-fare Beat Mission service in Peru and Argentina to connect people with essential services and goods, such as pharmacies, hospitals, grocery stores, supermarkets, malls, and banks. They also immediately arranged transportation for essential workers like medical, bank, and supply chain personnel. Within the first 47 days of the emergency service’s operation, Beat offered rides to more than 18,000 people daily, and helped 26,000 drivers earn an income.
The Beat Bus initiative gave free bus service to more than 1,800 frontline medical workers during the lockdown, while the Beat Envío courier service in Peru, Chile, Colombia, Mexico, and Argentina transported goods and supplies such as groceries, medicine, prepared food, clothing, and documents.
Because their customer and driver communication network is extensive and well connected, the company was also critical in supporting cities in the effort to push out safety messages and improve overall awareness, she adds.
“The fact that we have almost 24/7 access to our audience, both drivers and passengers, makes us quite agile in communication,” Ilic explains. “We also stay on top of what’s happening because we get feedback from passengers who rate every ride, and run surveys every couple of weeks to understand the sentiment of the market when it comes to safety and security measures we need to follow.”
Beat Tesla service
A downturn in the market might not seem an advantageous time to expand, but their recent launch of Beat Tesla service “is a no-brainer,” Ilic says, for a number of reasons.
As part of its efforts to reduce its carbon dioxide emissions, Beat recently launched their Beat Tesla service in Mexico City. The launch marks the first all-electric private EV fleet in Latin America, featuring Tesla Model 3 cars. The choice of circumstances for the launch is very deliberate, she says.
“The timing is quite critical for us, to make sure we reach a certain level of operational excellence as the COVID situation is improving,” says Ilic. “It only helps us to be even more ready for when cities return to moving at the same levels as before. We have time now to make sure we can execute on this.”
Although they’re the number one service in Peru and Colombia, in Mexico they’re a young player, and it’s a tough market, she adds.
“It only makes sense to innovate and try to be the first mover in important ways,” she says. “As a company that moves millions of people every day in massive cities, we need to play a bigger part when it comes to pollution and how cities evolve, how much greener cities can become as they grow,” she explains. “Besides us helping people move using cutting-edge technologies, we also wanted to contribute to addressing air quality in our communities.”
The second biggest advantage of the service was made clear by the impact of COVID-19.
“The pandemic made us realize that if we truly want to focus on our customers, the passengers, we need to control a lot more, and as much as we can, the supply side of the business,” she says. “Tesla’s model, where we hire the drivers through a third-party company and lease the cars as well, makes a very big difference.”
The service features Tesla’s high-end electric vehicles with zero carbon emissions rides, best-in-class COVID-19 sanitary measures from the driver screening stage thorough to the disinfection of cars, fully trained drivers, cameras recording and monitoring each journey in real-time, unlimited Wi-Fi connection, maximum legroom, and all-glass roofs.
“We want to be first, and that’s why we’re starting from the top of the pyramid, with the premium Tesla brand,” she says. “As we further see the evolution of EVs, that will help us push the electric model down the pyramid as we adopt different price points.”
The Beat Tesla Mexico launch is now beginning its third month of operation, and Beat intends to continue scaling, with plans to roll out the Tesla business model in Chile, Peru, Columbia, and Argentina. While those markets will include both Tesla and more affordable fares, the plan is for half of rides to be electric within two years – amid their entire fleet in all markets.
“We introduced the first and largest private all-electric car service in Latin America,” Ilic says. “That’s a big statement to make. It’s a great example to follow for different types of companies, not just our competitors. We’re contributing to the way a city moves, reducing CO2 emissions.”
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