Transportation is evolving since the day it has emerged. TaaS, or Transportation as a Service, is rapidly growing and is considered by many to invest in TaaS companies. Through TaaS, car ownership rates will eventually decline. Instead of owning a car, people will be able to buy trips, miles, or experiences without having to maintain their own vehicle. The industry has already started to pick hype and it’ll continue to grow in the coming years.
In addition, with governments working on carbon emissions, TaaS is the best way to optimize the transportation industry. For instance, Uber and Lyft are both examples of TaaS companies. Instead of having your own car, you can use a ridesharing app to it when you need a ride.
While TaaS companies may involve an app like Uber and a human driver right now, this will not always be the case. In just a few years, the first semi-autonomous cars will become commercially available.
There are many TaaS companies that are working to revolutionize transportation. With TaaS technology continuing to improve and evolve, these companies will increase their growth and market share.
Uber Technologies (UBER)
Uber Technologies (UBER) developed the first-ever ride-sharing app that changed the entire concept of transportation. Allowing a vehicle owner to use their car as a taxi opened up jobs for millions of people around the world. The company has gained popularity globally and has opened up subsidiaries like Uber Eats and Uber Pools.
Despite facing some legal issues regarding the employment contracts, Uber has moved from strength to strength. Being the biggest player in the TaaS companies, UBER has still massive growth potential, as the industry is yet to get full exposure. Uber’s ability to adapt to changing markets is great, and that puts it in a dominant position.
With its subsidiaries, the company is diversifying its services. Especially, Uber Eats provides local food delivery options in many cities around the world. Uber has indicated that it’s planning on expanding its food delivery services in the future.
Uber is really a dominant force in the sector. For instance, it acquires the start-ups or companies that are in competition with it. The company has recently acquired both Postmates and Drizly, which are food and alcohol delivery services. This completely eliminates the competition’s fear and also diversifies its portfolio.
Performing well on the financial side, UBER is a great TaaS stock to buy now for long-term growth.
Lyft (LYFT) is the next big company alongside Uber in the rideshare market. The company operates a peer-to-peer marketplace for on-demand ridesharing in the United States and Canada. It operates multimodal transportation networks that offer riders personalized and on-demand access to various mobility options.
With over 22 million active riders per quarter before the pandemic, Lyft has built itself into one of the largest global ride-hailing platforms. Lyft announced in mid-December that it would expand its offerings to include food delivery services. The company is collaborating with the online ordering platform Olo to use its drivers to deliver restaurant food. Lyft does not have plans to spin off its newest service into a separate app as its rival TaaS company, Uber has done with Uber Eats. It will instead collect a delivery fee from consumers on each delivery order.
Lyft stock got a brief boost from the company’s mixed fourth-quarter earnings in early February. The ride-hailing giant reported adjusted earnings of $0.90 per share on revenue of $970 million. Though Lyft beat Wall Street estimates on revenue, it reported fewer active riders in the last quarter. Lyft saw an active ridership of 18.73 million versus 20.2 million expected by analysts. Management says it is cautiously optimistic that it can accelerate sales growth beyond 2021’s 26% increase as the pandemic threat wanes.
All in all, LYFT stock looks like a good buy.
DoorDash (DASH) operates as a logistics platform that connects merchants, consumers, and dashers worldwide. It is among the fastest-growing TaaS companies in Silicon Valley. DoorDash allows customers to order food from local restaurants for delivery, with no minimum order.
The company recently announced that it is launching a financing arm to offer business loans to restaurants on its app. With DoorDash Capital, merchants will be able to apply for financing to fund business operations. That’s a big move for the company, which will ease things for food vendors to do business.
As of Dec. 2021, the financing market in the food space commanded 58% of the market for meal delivery in the U.S. DoorDash will certainly add to the revenue stream of the company.
Moreover, DoorDash will soon be reporting the fourth-quarter results. The company is expected to deliver a year-over-year increase in earnings on higher revenues. Revenues are expected to be $1.27 billion, up 31.2% from the year-ago quarter. While Consensus estimate suggests a quarterly loss of $0.27 per share, which represents a year-over-year improvement of almost 90%.
DASH stock is in a good position and it can give big returns in the future.
Virgin Galactic Holdings (SPCE)
Virgin Galactic Holdings (SPCE) is a spaceflight company within the Virgin Group. The company’s goal is to provide affordable commercial space travel. In recent years, the company has also increased its efforts to become an orbital human spaceflight provider to low Earth orbit.
Virgin is developing systems to take tourists into suborbital space where they will be able to view the Earth from above and return safely. We are not far away when the dreams of space lovers will come true.
Virgin Galactic has recently announced that it is getting closer to commercial operations. The ticket sales for its space flight are now open to the general public. This really is exciting news for aspiring astronauts, and it will certainly thrill investors as well.
Reservations for a 90-minute spaceflight will cost a total of $450,000. While the customers can make an initial deposit of $150,000 by applying via Virgin’s website.
The company believes that space is transformational. Virgin’s CEO Michael Colglazier says that they plan to have their first 1,000 customers on board at the start of commercial service later this year. The objective is to run regular operations and scale their fleet.
With these developments, SPCE is one of the best TaaS companies to invest in.
Matson (MATX) provides logistics, shipping, and transportation services across the world. MATX is one of the oldest TaaS technology companies. The company has a good reputation and its subsidiaries have done really well in the sector.
During the third quarter of 2021, the company reported a net income of $283.2 million, compared to $70.9 million in the same quarter of 2020. While the consolidated revenue was $1,071.6 million compared with $645.2 million for the third quarter of 2020.
The massive rise in third-quarter results was driven by strong economic and business trends in both ocean transportation and logistics. The rise in e-commerce delivery from China has really boosted the revenues of MATX. The company expects these conditions to remain largely in place at least through mid-year 2022.
Matson is close to announcing the fourth-quarter results. The estimates are in favor of MATX stock, considering the impressive surprise history with its earnings. Matson has surpassed the Zack’s Consensus Estimate in three of the last four quarters.
The gradual uptick in economic activities in the U.S. and widespread vaccination will be the key to these improved results. Considering the current circumstances, MATX stock looks like a good buy.