Only 15 Percent Of Americans Have Used A Ride-Hailing App
Despite its urban popularity, the on-demand economy is far from ubiquitous. Here’s what that means for the companies that power it.
Think on-demand apps have taken over the whole world? Think again: Only 15 percent of adults have used ride-hailing services and only 4 percent have hired someone online to perform errands or tasks, according to a report from the Pew Research Center.
As The Wall Street Journal put it, “ride hailing and grocery delivery [and more]… remain unfamiliar phenomena to the majority of people in the U.S. despite substantial inroads among young urbanites.”
Put simply, Pew’s new poll of 4,787 adults is clear: While ordering multiple meals a week from Postmates or hopping in an Uber may be an ingrained part of life for people in New York, San Francisco, and other major cities, this technology remains foreign for the vast majority of Americans.
So, what does this mean for on-demand apps?
Know Your Audience
Even if 85 percent of Americans have never called a car with an app, Uber and Lyft still have a massive devoted user base — enough to earn them valuations of roughly $60 and $5.5 billion, respectively.
But in smaller suburban and rural communities, where all or almost all residents own vehicles themselves, it stands to reason that ride-hailing services will have a much smaller presence or not be needed at all. These companies — major pioneers of the on-demand economy — seem to innately understand this, and while they are expanding into some smaller markets, they continue to concentrate a bulk of their energy (and their competition) on cities like NYC.
This is a model that other apps will need to follow. Additionally, it is important for service providers not to expand faster than the marked growth of consumer awareness of on-demand.
For example, one stat from the Pew study says that only 6 percent of people have ever ordered their groceries online. Intuitively, this makes sense; for urbanites who lack vehicle access — and often have to carry groceries into walk-up apartments — this kind of delivery could be worth the expense.
Is it wholly possible that, say, suburban parents with packed schedules will ultimately flock to such services for convenience as well? Certainly. But the likes of Instacart and Fresh Direct will need to build awareness and market themselves well in areas with less of an established on-demand presence: Test initiatives and targeted marketing campaigns will almost certainly be necessary.
As Pew put it, “exposure to these shared, collaborative and on-demand services at a broad level is heavily concentrated among certain demographic cohorts.”
The on-demand (or “gig”) economy is still decidedly young, and growth over the next few years will paint a much clearer picture of which types of on-demand services could be ubiquitous — and which will remain the province of a small sect of higher income city dwellers.