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 and disposable income
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Answer
The growth in GDP per capita in India suggests that consumers may have increased disposable incomes. This economic improvement likely allows more individuals to spend on ridesharing services, supporting growth in the sector.
Step 2
Literacy rates and technology access
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Answer
Rising literacy rates in India can empower more people to utilize ridesharing apps. With greater access to smartphones, the customer base for these services is anticipated to expand significantly, facilitating further growth.
Step 3
Market saturation in developed economies
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Answer
While ridesharing markets in developed economies may be becoming saturated, there is substantial potential in emerging markets like India, particularly with local companies like Ola and global ones such as Uber continuing to strive for market share.
Step 4
Projected customer growth
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Answer
The forecast of 539.49 million ridesharing customers globally by 2021 indicates considerable growth potential, especially in emerging markets such as India, where the market is less mature.
Step 5
Counterarguments: poverty and infrastructure
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Answer
Despite the positive outlook, it's crucial to consider factors that may hinder growth. Large rural areas in India still face high levels of poverty, limiting the potential customer base for ridesharing services. Moreover, infrastructure issues, including unreliable mobile communication and inadequate road access, could pose significant barriers to further development.
Step 6
Assessment of future growth viability
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Answer
In conclusion, while the ridesharing sector in India has considerable growth potential due to economic, educational, and technological factors, challenges such as poverty and infrastructure must be addressed to maximize this potential.
