The Unexpected Impact of Ride Sharing and Car Hailing Services
With the ever-increasing universe of ride sharing options taking global cities by storm, there may be an unanticipated impact to all of this.
While it may be counter-intuitive, evidence is showing that the explosion of ride sharing options is actually leading to an increase in the use of gasoline: not a decrease as many may have presumed due to shared rides.
According to a recent research report by Alliance Bernstein L.P. (Uber Oil: How the declining cost of mobility is raising global oil demand, May 2018), ride sharing and car hailing is leading to more people taking more trips than they may otherwise have taken. Cheaper fares for travel and the greater convenience of hailing a ride are a couple of leading causes for the change. As a result, the laws of economics would tell us that as the cost of mobility falls, the demand for mobility will rise.
So what does this mean for the energy sector?
Depending on the assumptions that you make based on this information, this could result in a few hundred thousand additional barrels of oil being used each year.