What Is TaaS Stock and Is It a Good Buy? (2024)

Once people start making ludicrous amounts of money on something, it’s probably too late to start investing. So your profit-making potential depends on your ability to recognize new and expanding markets. According to some analysts, transportation as a service (TaaS stocks) is one such opportunity. But do you know:

• What is a TaaS stock?
• What are the TaaS industry growth prospects?
• Which are the top TaaS stocks?
• Most importantly, is it a good investment in 2022?

Let’s see if we can answer some of these questions for you!

What Is TaaS Stock?

TaaS stock refers to a financial asset sold by a public company in the transportation as a service field. Before we look into some examples, let’s explain what the industry revolves around.

TaaS is a new mindset. It involves relying on a third party to solve your transportation needs. It can mean taking a rented vehicle, hiring a taxi/public transportation alternative, and much more.

Why is TaaS a rising industry?

The main reason this industry is currently booming is that car ownership seems to be declining. There are several reasons behind this:

• Cars are expensive one-time investments. And the purchase price is only the beginning. With the cost of maintenance, registration, insurance, occasional repair, cleaning, etc., owning a car can be compared to having another dependent in your household.
• Gas prices are increasing. At this point, it’s not just about the current gas price but also the fact that people recognize the possibility of future increases. These fears and the reasons behind them won’t disappear overnight.
• Remote work is becoming the new norm. Once reserved for the gig economy, the home office model has expanded to include most sectors and jobs. Supported by the recent technological advancement and accelerated by the COVID-19 pandemic, this trend means more and more people only need to use a personal vehicle occasionally. From this standpoint, the cost-effectiveness of using TaaS is much higher, as it doesn’t involve an initial investment.
• Parking space is shrinking as the population in urban centers increases. Drivers’ everyday commute becomes inconvenient. Moreover, there’s an estimate that cars spend roughly 95% of their time parked, making such a massive investment into an asset that they’ll use just 5% of the time.

In other words (and according to all these factors), TaaS is an industry with a bright future.

Who Are the Leaders in the TaaS Industry?

Asking a question like “Is TaaS stock a good buy?” is an oddly non-specific question. It’s similar to asking a person if they like the taste of food without specifying which one. A TaaS stock is a stock of any company in the TaaS industry.

Now that we have this out of the way, here are some of the best TaaS stocks to buy, based on their performance within the industry and on the stock market.

Uber (UBER)

Uber is definitely the best-known name in this industry. This is hardly surprising, seeing as how almost 19 million Uber trips are completed on a daily basis. It’s a San Francisco-based transportation-as-a-service provider which operates across the globe.

As of February 2022, the UBER stock price on NYSE hovers around $34.00. Analyst projections for the next 12 months, however, point at a value of between $43.00 and $80.00.

Lyft (LYFT)

Lyft is a company that offers ride-hailing, provides vehicles for hire, motorized scooters, and a bicycle sharing system. It’s one of the biggest TaaS companies.

As of February 2022, the Lyft stock value on NYSE is around $38.00. In the next 12 months, the stock price forecast projects a price between $47.00 and $85.00. In other words, buying a Lyft stock might be a smart idea in 2022.

DoorDash (DASH)

DoorDash is a food and convenience delivery company, which makes it even more interesting for people to see it on the TaaS investment list. Nonetheless, one of the primary functions of commuting is grocery runs, which makes its position here more than natural.

In February 2022, the value of DASH on the NYSE was around $102.00. Over the course of the next 12 months, the stock price is projected to grow somewhere between $118.00 and $230.00.

Avis Budget Group (CAR)

The next transportation as a service stock worth considering is the Avis Budget Group. This corporation is the parent company of companies like Avis Car Rental, Budget Car Rental, Budget Truck Rental, and Zipcar.

The value of this TaaS stock on NYSE was around $180.00 in February 2022. As far as the projections for the following 12 months go, market watchers suggest that the price would be anywhere between $168.00 and $333.00.

Additional considerations

There are three things you need to note before you invest in TaaS:

• First, like any other market projections, TaaS stock forecasts are just estimates. They’re not guaranteed.
• Second, there’s no such thing as a 100% safe investment.
• And third, while industries usually follow the same trend, it’s important that you observe each TaaS stock separately. So, learn the TaaS stock symbol of the company that you plan to follow and keep an eye out for it.

The Future of Transportation as a Service Stocks

All projections suggest massive growth in the industry in the near future. As evident in the examples we’ve discussed, even the most modest estimates for the next 12 months indicate a higher than the current TaaS stock price.

However, a couple of other factors affecting the TaaS stock prediction make it a bit more complex to pull off. Namely, trends like electric vehicles might sway the industry in either direction. Due to their lower fuel consumption, these vehicles might offer a cheaper commute, which might renew the interest in car ownership.

At the same time, there’s the concept of driverless vehicle technology to keep in mind. These vehicles are more expensive, which means that not many potential car owners will be able to afford them, increasing the reliance on TaaS. It gets even further, seeing as how driverless vehicles will reduce the TaaS companies’ overhead (payroll and employee-related expenses).

Lastly, it’s also worth mentioning that the disaster that was the COVID-19 pandemic had a significant impact on the TaaS industry. Sure, delivery services increased in popularity, but the financial drop caused a decline in purchasing power parity. Moreover, people working from home had less interest in using TaaS options. As the crisis ends, the industry is likely going to increase its growth pace.

Is TaaS Stock a Good Buy?

According to O.P. Agarwal, World Bank and chairman of the Transportation Research Board Committee on Transport in Developing Countries, trends like telecommuting, e-commerce, and online shopping might change the way in which we perceive urban transportation. These trends are likely to change the nature of traditional car ownership while creating a larger market for TaaS.

The projected growth of TaaS stocks value in the next 12 months is solid, and the current prices are comparatively low, which might just signify the right time to buy.

Still, it’s not just about buying TaaS stock or not. It’s also about finding the right TaaS companies to invest in.

Key Takeaways

The COVID-19 pandemic has halted the TaaS growth, and we might have to wait a bit longer for the industry to unleash its full potential. But with the developments in the automotive industry and the recent shift in consumers’ behavior, the future seems quite bright.

Like with any other type of investment, your ability to make a lucrative investment depends on your ability to find the best TaaS companies available.