New ad opportunities arise from a rise in ride-hailing usage

Article by Yoram Wurmser | Nov 2, 2023

A strong 2023 will finally bring the ride-hailing user base above pre-pandemic highs. The additional 6.6 million users in the US in 2023 represent a 10.1% increase. User growth will decelerate going forward, but ride-hailing companies still stand to add an additional 14.7 million US users between now and 2027.
Nearly a third of the US population will be a ride-hailing user by 2027. With 86.7 million users in 2027, ride-hailers will represent 31.7% of the US population.
Uber will keep its large lead over Lyft. Although Lyft will add users at a slightly faster rate than Uber this year (11.7% versus 10.3%) and each year through 2027, Uber will actually add more users each year—expanding its lead from 23.5 million US users in 2023 to 26.5 million in 2027. In 2023, Uber will finally pass its 2019 record for US users, but Lyft will have to wait for 2024 to reach its own new high.
Uber’s growth is driven by innovative new products. Among them: Uber Carshare (peer-to-peer car sharing), Uber Reserve (pre-booking service), and a flexible lease pilot with Ford.

Uber is far ahead in building an ad ecosystem. Uber reported that its Q2 2023 annual run rate for advertising hit $650 million and could surpass $1 billion by 2024. Uber has ads in most parts of the customer journey—the mobile app, backseat screens, as well as displays on top of a small number of cars—and the company is continually expanding its ad repertoire. Uber recently created a retail media network in the Uber Eats app, where brands can buy ads that show up as users search and order food.
Lyft is trying to catch up. It hasn’t reported its much smaller ad revenues, but according to Global Wireless Solutions, those revenues grew 400% YoY in Q2. Lyft has a limited number of screens in backseats and a few displays on top of cars. App ads are currently display-only, but video ads should appear by the end of 2023.