Photo AI
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
Understand the context of ridesharing in India
Answer
Ridesharing businesses, such as Ola and Uber, have become increasingly relevant in India. The growth in GDP per capita indicates that consumers may have greater disposable income to spend on such services. Additionally, rising literacy rates mean that more individuals can use smartphone applications to access ridesharing platforms.
Step 2
Analyze the projected growth in numbers
Answer
The number of ridesharing users is forecasted to reach approximately 539.49 million globally by 2021. A significant portion of this growth is anticipated to occur in emerging markets like India, suggesting a strong future for ridesharing services.
Step 3
Identify potential challenges
Answer
Despite the positive indicators, challenges exist. Large parts of India still experience high levels of poverty, which can limit market growth. Language barriers and insufficient infrastructure for mobile communication may also hinder service expansion. Furthermore, while literacy is on the rise, some consumers may remain unable to effectively use technology.
Step 4
Evaluate the future growth prospects
Answer
Given the current trends and economic conditions, it is likely that ridesharing businesses will continue to grow in India. This trend provides a favorable alternative to traditional car ownership, especially for those with limited disposable income. Continued urbanization may also drive demand for ridesharing services. However, if alternative transport options become more readily available, such as public transport, growth could be affected.