What Will Urban Mobility Look Like In 2035?
by Andreas Nienhaus, Steffen Rilling & David Markey, Oliver Wyman —
How will mobility services reshape cities by 2035? New technologies and regulations are transforming the way we travel and challenging industry executives to find new revenue streams and operating models: Oliver Wyman Forum Value Pool Report
Disruptions from new technologies and regulations in mobility are not only transforming the way we travel but are challenging executives to find new revenue streams and operating models.
Rapidly expanding markets like electric vehicle charging and advanced driver‑assistance systems hold promise for a more sustainable, equitable, and efficient mobility future, while on-demand services and smart parking services are making travel more convenient and enjoyable.
Business leaders looking to steer their firms through an uncertain economic climate should use this report to understand how to capitalize on uniquely growing markets. To that end, the Oliver Wyman Forum has compiled expert opinions and research on macroeconomic trends, social factors, and microeconomic drivers to forecast mobility’s growth to a $1.1 trillion industry by 2035.
The analyses not only provide in-depth insights into major mobility modes and services, but also revisit assessments and past forecasts on technology development to offer explanations on why certain segments have performed better or worse than previously expected.
This report, which forecasts activity across 14 sectors and five regions to 2035, offers a novel opportunity to anticipate markets with an analytical depth not seen elsewhere.
The next generation of technology is intersecting with regulatory shifts and industry consolidation to drive global mobility industry growth to $1.1 trillion through 2035, from $389 billion in 2023, with the highest rates of growth forecasted in Asia. Individual mobility modes were the main drivers of past growth in the mobility sector, and former market disruptors like ride-hailing and e-scooters are largely settled in most major markets. Now, digital services like advanced driver-assistance systems (ADAS) and electric vehicle (EV) charging are set to account for much of the industry’s growth.
These digital services are projected to have average growth of 25% per year over the current decade through 2035, compared to 9% for the overall mobility sector. Digital services are expected to generate annual revenue of $610 billion in 2035, up from $42 billion in 2023, with potential gains for sustainability and the livability of cities.
To gauge the impact, the Oliver Wyman Forum analyzed 14 mobility services — from ride-hailing and EV charging to navigation services — across five regions: North America, Europe, Africa, the Middle East, and Asia.
The forecasts included in this report represent a slight decrease in total expectations from the Oliver Wyman Forum’s previous Mobility Value Pool report, published in 2022.
Keep reading the executive summary…
Urban Mobility In North America
North America’s car-centric culture, sparse public transit, long commute distances, and sprawling cities are fueling the most growth in digital services that cater to private cars. Advanced driver-assist systems, EV charging services, and smart parking will have the most growth among the region in an otherwise sluggish forecast. With an overall mobility market rising by 8% annually, North America only ranks higher than the Middle East in terms of growth rate due to an already mature market.
North America accounted for 31% of the mobility market in 2023 when it totaled $119 billion, and is projected to slip to 25% of that share in 2035 when the market will grow to $285 billion.
Cars are the dominant mode in North America. An average of 92% of consumers reported using a personal car, according to a June 2024 Oliver Wyman Forum survey, reflecting population density sprawled over large countries with relatively sparse public transit to serve them. And while car-as-a-service providers are entrenched in a mature market without much room for growth, a shift away from car ownership among urbanites may fuel growth.
Car rental is popular in North America, accounting for 42% of North America’s consumer mobility spending on mobility modes in 2023. That mature market leaves room for only modest growth, and three major players dominate the vast majority of the airport and off-airport markets. North America’s car rental market is projected to rise 3% annually, from $46 billion in 2023 to $66 billion 2035.
Car subscriptions and sharing could be a popular option for city residents who find it inconvenient to own a car, but providers may have to first increase awareness. Many car subscription providers in North America are not yet profitable due to high customer acquisition costs and the new nature of the sector. The car subscription market is expected to grow from $2 billion in 2023 to $5 billion by 2035 at an 8% annual rate.
North America’s ride-hailing and carpool markets are large, accounting for just under half of all mobility revenue in the United States. Ride-hailing in North America has the highest average distance per ride compared to any other region, although usage rates vary by nation: 43% of US consumers reported ride-hail trips, compared to 72% of Mexican consumers and 36% of Canadians, according to a June 2024 Oliver Wyman Forum survey.
Ride-hailing is popular in North America, and providers are transitioning to electric and autonomous options. One ride-hailing provider is partnering with automakers and charging providers, for example, to give drivers easier access to EVs and charging options, and partnered with an autonomous driving company to develop autonomous ride-hailing services. The overall North American ride-hailing market will likely rise from $56 billion in 2023 to $57 billion in 2035, at a 0.3% annual rate.
While ride-hailing growth continues, the industry’s tech transformation is paused until autonomous driving is broadly introduced. Robo-taxis will offer cheaper prices for consumers as labor costs are lowered for providers, enabling higher usage rates. But that increase in usage will not raise overall revenue for providers, as the price for consumers will decrease greatly and will not be fully offset by an expected increased volume of rides.
Consumer penchant for car travel and long average trip distances pose a challenge for micromobility services. Roughly a third of US and Canadian consumers say they use micromobility services in an average month, according to a June 2024 Oliver Wyman Forum survey. And a high growth in personal ownership rates of e-scooters and bikes saps customers away from sharing services.
Digital services that cater to cars, like EV charging, advanced driver-assistance systems, and smart parking, will have the largest growth of any other mobility market in North America.
The full North American regional summary examines digital services including advanced driver-assistance systems, electric vehicle charging services, in-vehicle digital services, smart parking, and navigation services.
For more region summaries and a retrospective view of the 2022 Mobility Value Pool report, access the full report or download a copy in PDF format from Oliver Wyman: What Urban Mobility Will Look Like In 2035 – New technologies are transforming travel and challenging industry executives to find new revenue streams and operating models.
About Oliver Wyman
Oliver Wyman is a global leader in management consulting. With offices in more than 70 cities across 30 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 7,000 professionals around the world who work with clients to optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a business of Marsh McLennan (NYSE: MMC). For more information, visit www.oliverwyman.com.
Source: Oliver Wyman
