Assess the likely future growth of ridesharing businesses in an emerging economy, such as India.
- Edexcel - A-Level Business - Question 2 - 2022 - Paper 1
Question 2
Assess the likely future growth of ridesharing businesses in an emerging economy, such as India.
Worked Solution & Example Answer:Assess the likely future growth of ridesharing businesses in an emerging economy, such as India.
- Edexcel - A-Level Business - Question 2 - 2022 - Paper 1
Step 1
GDP per capita in India is growing
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Answer
The growth of GDP per capita in India indicates that consumers may have increased disposable income, allowing more people to spend on ridesharing services. A higher GDP often correlates with enhanced consumer spending power.
Step 2
Rising literacy rates
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Answer
As literacy rates in India rise, more individuals can effectively use technology, including smartphone apps for ridesharing. This accessibility can lead to a broader customer base for services like Uber and Ola.
Step 3
Emerging markets
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Answer
Ridesharing markets in developed economies may be saturated; hence, emerging economies like India present significant growth opportunities. The projected customer base is expected to reach 539.49 million by 2021, highlighting potential for rapid growth.
Step 4
Potential counterbalancing factors
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Answer
However, large parts of India, especially rural areas, face high levels of poverty which may limit growth in ridesharing. Additionally, while literacy is increasing, communication barriers due to language diversity may also hinder widespread app usage.
Step 5
Infrastructure concerns
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Inadequate infrastructure, such as unreliable road networks and inconsistent mobile connectivity, could impact the reliability of ridesharing services. This may result in users opting for alternatives rather than relying on app-based services.
Step 6
Future growth potential
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Answer
Regardless of the challenges, ridesharing is likely to continue growing in India as it offers a viable alternative for transport ownership, especially for consumers with limited disposable income. Continued economic growth is essential for this sector to thrive.
