Half the funding in the Collaborative Economy goes to transportation.

By our count, the Collaborative Economy has been funded $25 billion, one of the highest funded tech industries, ever. For comparison, global social networks have been funded a mere $6 billion, which is just a quarter of the Collaborative Economy. Within the $25 billion funded, $13 billion has been invested in the transportation space, which is 52 percent of all funding dollars.

What’s shared transportation?

Chances are, you’re already using it. First, let’s define the category of shared transportation. It includes rides as a service and vehicle sharing.

If you’ve taken a ride as a service such as Lyft, Uber, Ola or Didi, you’ve participated in shared transportation. If you’ve experienced ridesharing or carpooling with startups such as BlaBlaCar in Europe, you’ve also participated. If you’ve borrowed a car from a peer using startups such as RelayRides, Getaround or a boat from Boatbound, Sailsquare or Boatsetter, you’ve participated in sharing vehicles.

Startups in Europe, India, China and the U.S. are receiving funds

How is this $13 billion of funding distributed? First of all, it’s hard to fully calculate, as some of the debt financing to Uber makes it difficult to truly tabulate. Here’s a breakout of the top startups: Uber more than $6 billion; China’s Didi more than $4 billion; Europe’s BlaBlaCar more than $2 billion; America’s Lyft more than $1 billion (Lyft is partnered with Didi); and India’s Ola Car more than $600,000. These startups lead the overall top-funded tech companies, even across multiple sectors. See full stats on this multi-tab Google sheet.

10 reasons why investors love shared transportation

So why have VCs invested so much capital into the transportation space? There’s at least 10 reasons why this category is so attractive:

1. Everyone needs it. We’re all dependent on mobility and transportation; even shut-ins need services and goods brought to their homes. The physical movement of goods and services is the lifeblood of an economy, and now it’s digitized for all to harness using these technologies.
2. Most people will live in big cities. Multiple urbanization studies indicate that most of Earth’s population will reside in large dense cities, many inside of "Megacities" which have more than 10 million inhabitants. The rise of the population, and the density that comes with it, means that shared vehicles and shared rides are inevitable.
3. Rapid global adoption. While various carpooling efforts have existing for years, the mobile-based apps phenomenon triggered massive growth. Adoption numbers cited from startups show a rapid increase in adoption globally. The ability to access a ride is as easy as downloading an app and connecting it to your credit card.
4. Vehicles are mostly idle. Vehicles, whether they be autos, boats or trucks, are some of the least used assets that we own. We’re often in our homes a third of the day, but vehicles are only used 5 percent of the time or less. These idle assets that clog up parking, streets and neighborhoods can be activated in car sharing, reducing the number of cars on the road.
5. They’re expensive assets. Many view vehicles as depreciating assets, or in some cases, liabilities that require payment plans, insurance, gas, maintenance, parking and more. For those in an urban environment, the costs can increase even further with storage costs, parking tickets and more.
6. An easily shareable asset. Unlike personalized clothes, perishable food or seasonable sporting goods, autos and mobility services are easily shared from person to person. In most cases, humans can interchange seats or vehicles as easily as they change their daily outfits.
7. Positive sustainability impacts. Investors such as Structure Capital, Collaborative Fund and Sherpa Ventures have shared their investment thesis in the world demonstrating their commitment to reducing waste, making the world more efficient or helping communities.
8. Extends value to other industries. The transportation space isn’t limited to just the value of cars or taxis, but extends its impact to many other industries, including: logistics, shipping and storage; personal services such as retail delivery, home cleaning and other on-demand services; and traditional car loans, insurance and more.
9. VCs are likely to fund competitors. Venture capitalists are pressured to have an appropriately rounded investment portfolio to match their thesis. When one VC firm funds Lyft, the other investors need to round out their portfolio, meaning they’ll fund Lyft’s competitor to ensure they don’t miss a trend.
10. Immediate revenue generation. If one thing makes this category so attractive to investors, it’s that each transaction generates 10 percent to 15 percent cash flow to the tech startup. Unlike struggling social media startups still searching for their revenue models, this market generates direct revenues for every transaction — with low costs.

This is just the start of the shared transportation space. Other players such as Google are expected to enter this space; telecom companies such as Verizon have launched auto sharing applications; and BMW (client), Daimler, Ford and others have launched car sharing programs, which all spur the movement forward.

Furthermore, self-driving cars are being produced by Uber, with its recent acquisition of over 50 CMU professors to build said self-driving cars. With Apple, Google, Tesla and other Silicon Valley heavy hitters building autonomous vehicles, they no doubt will make them available as shared services, where you can have a vehicle fetch you — instead of your having to own one.