A massive advantage of ride-sharing companies like Uber or Lyft is that their business model is extremely capital-light since they don’t buy or own any cars in their fleet as individual owners own them. Instead, TaaS companies operate on a fixed cost model, where they run high costs for expansion, software infrastructure, and customer acquisition. Still, after a point of scale, operating leverage kicks in, and profitability grows multifold. Another big advantage of TaaS players over traditional transportation companies is far superior capacity utilization. They do so by matching capacity and demand at a huge scale by the use of technology. For example, ride-sharing companies like Uber can match customers and cab drivers in the same area directly through their app. This ensures that the number of Ubers in an area is completely utilized while ensuring that all customers get a car.
The ride-sharing phenomenon has irradicated the need to buy cars for people in urban cities as TaaS companies can ensure assured service 24/7. Another exciting and successful use case was that TaaS companies could really make cab sharing effective as it could club people going to the same area and connect them with a driver. This helps people save a lot of money due to cost-sharing, which in most cases rivals that of public transport like a metro or bus. Further, TaaS companies could expand so fast because of the growing gig economy going as car owners with spare time could drive for ride-sharing companies and earn passive income.
Apart from ride-sharing, other TaaS business models include vehicle sharing, where companies can buy a large number of small vehicles such as scooters or bikes and distribute them all over a large city. Their customers then use their apps to use one of those vehicles and park it at their destination, where it is then assigned to another user. Another prevalent business model is Delivery-as-a-Service. People who own vehicles such as cars/vans/bikes can use their spare time to deliver food from restaurants or packages to earn passive income.
The Best TaaS (Transportation-as-a-service) Stocks for Canadians
Here are some of the best TaaS companies to invest in –
Uber (NYSE: UBER)
Uber is the biggest name in the TaaS game. The company was the pioneer of the TaaS sector has since become the poster child of the same and venture-capital-backed tech with a market cap of $76.4 billion. The company made its stock market debut in 2019 and has since hovered around its IPO price. Over the past 2 years, the company has had to deal with various setbacks such as paying complete employment benefits to contract workers, who constitute the bulk of their workforce, and COVID, which dealt a devastating blow to their business. However, the company has since been able to bounce back strong along with the economy after drastic cost-cutting measures and take some big write-downs. As of 2021, the company operates in nearly 70 countries and has facilitated more than 7 billion customer trips. Of late, the company has entered a partnership with Daimler (parent company of Mercedes-Benz) and Otto, a developer of autonomous vehicles, to provide autonomous vehicle services by 2025. Analysts believe that autonomy will be the key to the company’s profitability.
Uber’s business model is based on commissions where the company gets a cut of the total billable trip cost bourne by customers. In 2020, Uber took a big hit as people were forced to stay home due to lockdowns and social distancing. However, their food delivery business thrived and reported revenue growth of a massive 200%. Unfortunately, their core ride-hailing business took a hit of 20%. In 2021, things are looking much better. In Q1’21, the company reported a revenue of $2.9B (down 10% YoY), an operating loss of $1.52 billion (down 42% YoY), and a net loss of $108 million (down 96% YoY). in Q2’21, the company reported a revenue of $3.93 billion (up 105% YoY), an operating loss of $1.16B (up 17% YoY), and net income of $1.14 billion (up 164% YoY).
Lyft (NASDAQ: LYFT)
Lyft was the second major company to come out of the TaaS sector. The company has a nearly identical business model to that of Uber. Still, it differentiates itself with clever marketing on the streets, with each of its cars having a distinct pink mustache on the front bumper. The company offers the same ride-hailing services as Uber but is heavily concentrated in California and the US, which are by far its biggest markets. Lyft also has a presence in Canada, which is its only international market. The company has a market cap of $17.64 billion. Like Uber, the company has partnered with autonomous vehicle startups Argo and Ford to provide autonomous taxis.
Like Uber, the pandemic took its toll on Lyft. In FY20, the company reported a revenue of $2.36 billion, an operating loss of $1.76 billion, and a net loss of $1.75 billion. In Q1’21, the company reported revenues of $609 million (down 36% YoY), an operating income of $416 million (down 19.32% YoY), and a net loss of $427 million (down 7.3% YoY). In Q2’21, the company reported a revenue of $765 million (up 125% YoY), an operating loss of $219 million (up 56% YoY), and a net loss of $252 million (down 42% YoY).
DoorDash (NYSE: DASH)
DoorDash is different from Uber and Lyft because it does not offer a ride-hailing service but offers delivery-as-a-service. The company uses software to help small and large restaurants do away with having to set up their own delivery infrastructure. Instead, they connect their network of riders to them who pick up and deliver their food to customers using location services. The company made its long-awaited market debut in 2020, a year that saw its business really take off as customers were stuck at home. DoorDash has a market cap of $71B. In addition, the company is investing heavily in drone delivery services that will dramatically increase efficiency and lower costs.
In FY20, the company reported a revenue of $2.89B (up 226% YoY), an operating loss of $399M (up 34.7% YoY), and a net loss of $461 million (up 30% YoY). In Q1’21, the company reported revenue of $1.08 billion ( up 197% YoY), an operating loss of $99M (up 19.5% YoY), and a net loss of $110 million (up 14% YoY). In Q2’21, the company reported revenues of $1.24 billion (up 83% YoY), an operating loss of $99M (down 400% YoY), a net loss of $102 million (down 543% YoY).
Yandex (NYSE: YNDX)
Yandex is a multinational conglomerate that provides digital consumer services across multiple countries. The company has over 70 tech businesses, including e-commerce, IT, EVs, digital payments, etc.; TaaS is only a part of its operations. Yandex’s biggest markets are Russia, the Middle East, and Africa. The company offers both ride-hailing and food delivery services. In 2018, the company merged its ride-hailing operations with Uber’s in multiple countries such as Russia and got majority ownership of the combined operations. The company is a great buy because of its exposure to multiple high-growth markets such as the Middle East and Africa. Yandex has a market capitalization of $28.6 billion.
In FY20, the company reported a revenue of $218B (up 24% YoY), an operating income of $16.25 billion (down 36% YoY), and a net income of $25.51 billion (up 98% YoY). In Q1’21, the company reported a revenue of $73.4 billion (up 55% YoY), an operating income of $96 million (down 98% YoY), and a net loss of $2.98 billion (down 151% YoY). In Q2’21, the company reported a revenue of $81.4 billion (up 96% YoY), an operating loss of $4.72B (down 1000% YoY), and a net loss of $3.88 billion (down 14.18% YoY). The company’s poor financial performance this year was mainly on account of the delta variant.
Facedrive (CVE: FD)
Facedrive is a new Canada-based ride-hailing company that is focused on the impact of transportation on climate change. The company is very socially responsible as it offers mainly eco-friendly modes of commute and delivery to customers using EVs. Further, the company offsets its carbon emissions from traditional vehicles by making users aware of their carbon footprint and offers them a choice of vehicles between EVs and gasoline vehicles. Apart from that, the proceeds from each gasoline-powered ride are used to plant trees and offset emissions. In 2020, the company expanded into food delivery and health tech. In health tech, the company has developed its own wearable devices that individuals can use to track and stop transmission of COVID in dense areas like cities, construction sites, offices, and schools. The company has also launched a unique marketplace where they only sell environmentally friendly products and use their own delivery network to deliver the products. The company also has a vehicle subscription service that offers users a car on-demand without the need for them to own one. Facedrive only offers EVs under this service. Lastly, the company also operates a platform called ECO-Cred, where they help businesses and consumers to buy carbon offsets.
Facedrive is a very new company, and hence the scale of its operations is very small; however, it has been growing spectacularly well. In FY20, the company reported a revenue of C$3.93 million (up 556% YoY), an operating loss of C$18 million (down 297% YoY), and a net loss of $17.76 million (down 155% YoY). In Q1’21, the company reported a revenue of C$4.26 million (up 997% YoY), an operating loss of C$6.74 million (down 314% YoY), and a net loss of C$5.88 million (down 292% YoY). In Q2’21, the company reported a revenue of C$5.8 million (up 6092% YoY), an operating loss of C$8.16 million (down 20% YoY), and a net loss of $7.56 million (down 13.57 million YoY).
As you can see, the company’s growth has been awe-inspiring, and climate consciousness is increasingly becoming more important in the world, which makes FaceDrive a desirable investment.
While TaaS companies have great business models on paper, they have struggled to get profitable due to intense price competition and low to zero product differentiation. This manifested into a bunch of big players incentivizing customers through discounts and offers in pursuit of growth and scale, which will eventually result in massive profitability. Further, autonomous vehicles will really be a game-changer for the TaaS market as people won’t need a driver to put their vehicles to work when they are at the office or home. This can be a real inflection point for these companies. As time passes, smartphones are becoming more and more ubiquitous, and by that extension, the addressable market of TaaS companies is growing. Although profitability has been a big issue, growth has not, and these companies have continued to grow quickly, which makes them attention-worthy.
Canadian TAAS Stocks
TAA is the future of transportation, new systems that take cars off the road, change the way we think about ownership and offer unique investment opportunities. The TAA market is expected to reach $8 trillion and includes ride-sharing, passenger transportation, freight, food, drone deliveries and distribution. Institutional investors investing in TAA target early-stage companies, with venture capital funds investing in publicly traded companies such as Uber Technologies, Lyft, and other companies with ties to the electric vehicle industry.
Transport as a Service (TAAS) is an emerging industry that has experienced an upswing in recent years. As a result, many experts predict huge growth for TAAS companies in the coming years, and TAAS shares seem to be a great investment. Read on as we explain all you need to know about the TAAS industry, introduce some of the largest TAAS players and provide important information for potential TAAS investors.
Transport as a Service (TAA) allows people to enjoy the benefits of a car without having to own one. There are many excellent examples of TAA that have become popular in recent years. Ridesharing services like Uber and Lyft are a great example of TAAs, as they give people access to affordable on-demand rides without ever having to own a car.
Instead of owning a vehicle, people can buy a travel experience. For example, Uber and Lyft are examples of TAAs because rather than owning your own car, you can rent a car with a ridesharing app when you need a ride. TAAs, also known as MAAs or mobility as a service, are transport systems that replace car ownership with a service-based mobility solution.
Instead of owning a car, people can purchase travel, miles and experiences without maintaining their own vehicle. Rather than focusing on car ownership, TAAs are often about renting a vehicle or similar practices.
The idea of the TAA is growing as urbanization, and individual transport becomes a burden and the need for daily mobility and transport services increases. Given the industry’s many benefits for humanity and clean energy, governments worldwide are expected to offer TAAS companies favourable policies and tax breaks to facilitate operations, increase profitability, and increase share value. It will also make it easier for companies offering TAAS services to find customers.
Whitney Tilson, the founder of a research firm called Empire Financial Research, decided to raise awareness of how TAAS (Transportation as a Service) brings in important funding. As a result, industry Growth Insights publishes new Transport as a Service (TAAS) market data. TAAS is an innovative opportunity and drives the world of vehicle technology forward.
Last week, Facedrive Foods gave an insight into how serious the Canadian food industry is about it. The acquisition of the assets of Foodora Canadas will give the company a big boost in revenue and a huge jump in space ahead of its major Canadian competitors such as Uber Eats and Skip the Dish. Investment opportunities in autonomous and electric vehicles: An investment recommendation from Tilson puts its equity and investor services empire to the test.
SAAS shares are Software-as-a-Service shares that represent ownership of a company that provides real-time access to online software. When you invest in TAAS services, stock market orders can be used as a limit order to delay your purchase until the stock reaches the desired price.
This is designed to improve the efficiency of moving people and goods from one place to another. As a result, we can shift transport from a supply-oriented sector to a demand-oriented service sector. The product segments provide information on the market share of the individual products and the respective CAGR for the forecast period.
These could be sustainable ESG investments in transport, merch, healthcare, food delivery, long-distance car-pooling, COVID 19 contact tracking, etc. Transport as a Service Stocks refers to shares of companies that offer technology-based services in the transport industry. A Transportation As a Service (TAAS) or Mobility as a Services (MAAS) company is an organization whose main service or product offering is to improve transportation efficiency through computer infrastructure, platforms and software.
The company anticipates having a presence in 20 cities and recurring revenue from its aviation segment, accounting for more than 50% of its annual revenue. Over the next decade, the company plans to sell 14,000 vehicles and generate $20 billion in sales. In addition, the company expects aircraft to generate $22 million, with a further 850 scheduled for service.
Lyft is a successful ride-sharing company that is a direct competitor to Uber. The two companies were founded at the same time and offered similar services. The difference between the two companies is that Uber and Lyft offer ride-sharing services, while Uber also provides food deliveries and other services.
Like many other companies, Aptiv withdrew its credit line to ensure the company had the financial flexibility to halt its dividend, meaning it does not know what will happen in the coming years. Uber and Lyft have spent billions of dollars to bring ride-sharing to the mainstream. Still, the next-gen ride-sharing company should be one step ahead of its game by highlighting the big problems with exploding ride-sharing and creating an environment where investors have no time to pressure corporate ethics. The future of transportation in the United States is now, and the company needs to fix its mistakes.
It’s one thing, I’m not crazy about Dana Dan, but given the sheer exposure of how many cars are sold, NXPI has been a challenge in recent years due to the tug of war over how important NXP is to assess whether it’s the leading NFC chip that allows your iPhone to pay for registration at Whole Foods before you subtract your virus-soaked cash, growth or just a good bit of sexiness in business. As a result, NXPI is heavily dependent on the automotive sector and new cars.