If you’re looking for shares that will offer you growth and return on investment, look no further than TaaS stock. But before you invest, it’s important to understand what TaaS is and how it works. In our article, we’ll get down to the nitty-gritty of TaaS stocks so that you can make an informed decision about whether or not to invest.
Sounds interesting? Let’s get into it!
What Is a TaaS Stock?
First, let’s answer – what is TaaS? TaaS is an acronym for “Transportation-as-a-Service”, or as some call it, MaaS (Mobility-as-a-Service). In other words. It’s a new way of getting around for people who don’t have their own vehicles.
It’s becoming increasingly popular as more people look for alternatives to traditional forms of transportation that provide them with many benefits.
Therefore, Transportation as a Service stock is the term used for investing in companies that provide this service, like Uber, Lyft, and Yandex. But why would someone invest in a stock? Well, with the increasing focus on lowering carbon emissions coupled with convenience, cost-efficiency, and freedom, a greater number of people have started seeing the perks of this investment.
Some of the most popular TaaS companies offer a wide range of services, such as:
- Food delivery
- Renting vehicles
- Scheduling rides
Best TaaS Stocks to Buy in 2022
Most Canadians are familiar with the most popular TaaS stocks on the TSX stock market, like Uber, Lyft, and Yandex. Each of these platforms offers car rental and car-sharing services while fighting for the largest market share. So without further ado, let’s check out the best TaaS companies to invest in.
If you live in Canada, there’s a very small chance you haven’t heard of Lyft. The company is one of the leading ride-sharing companies in both the US and Canada. Currently, Lyft has more than one million active drivers and 12.5 million riders quarterly. Moreover, it reported a revenue of $3.2 billion for the fiscal year of 2021, an increase of approximately $800 million from 2020.
Uber is arguably the dominating TaaS service in Canada and approximately 70 other countries and 900 cities. Therefore, it’s no surprise that it will number around five million drivers and 93 million monthly platform consumers in 2020. The company saw a revenue of $25.9 billion in 2021, up 51% from its result in 2020, making it the highest-grossing TaaS company on the market.
Although Yandex is not as prominent on the Canadian market, it holds a large proportion of the TaaS market across Eastern Europe, Africa, Russia, and the Middle East. Yandex is an international IT company involved in the development of self-driving cars. As proof of its success, Yandex recorded annual revenue of 356 billion rubles, or $6.14 billion in 2021.
Founded in the United States in 2013, DoorDash is a relatively new, yet popular name in the TaaS industry. Unlike Lyft’s car-sharing services, DoorDash focuses primarily on helping large and smaller restaurants with their day-to-day delivery by using software and a network of drivers. The company’s business skyrocketed in 2020 thanks to lockdowns and COVID-19 measures. However, DoorDash is still going strong considering it reached a revenue of $1.04 billion in 2021.
Facedrive is a recently founded Canadian ride-hailing company which recently expanded to health tech and food delivery. The company aims to provide sustainable transportation and delivery services by allowing customers to choose from their range of EVs and gasoline vehicles. What’s even better, Facedrive donates the earnings from each ride towards reducing carbon emissions and planting trees. Although it’s a small and relatively new company, Facedrive managed to report revenue of $25,416,500 for the fiscal year of 2021.
Why Should You Invest in TaaS Stocks?
Now that you know what TaaS stocks are, let’s talk about the benefits of investing in a TaaS company.
Since TaaS is a relatively new industry, its prospects are only projected to grow in the coming years. With more people refusing to buy their own vehicles, many have recognized the convenience and efficacy of transportation services that aren’t public transport. Investors expect TaaS companies to irreversibly change how we perceive urban transportation.
TaaS is powered by Artificial Intelligence (AI), which has shown significant growth in the tech industry. Many leading companies are investing heavily in this new software, thus increasing the demand for such services, directly impacting the market for TaaS.
Clean Energy and Sustainability
Additionally, TaaS is a clean energy solution that is becoming increasingly important as the world looks to address climate change. With the addition of carpooling, TaaS vehicles are significantly cutting down carbon emissions, making them much cleaner than traditional forms of transportation.
The traditional transportation industry is ripe for disruption, and TaaS is at the forefront of this change. Therefore, there are many opportunities for investors to profit from the subsequent growth of the industry.
Downsides of Investing in TaaS Stock
However, every industry has its drawbacks, and despite the positives, there are risks to consider before investing in TaaS stocks. Let’s go over them.
First, the capital requirements for TaaS companies are significant, meaning that they may need to raise additional capital in the future, thus diluting shareholders’ equity.
Second, the TaaS industry is highly competitive. Unfortunately, many companies are vying for market share, making it unclear who will emerge as the winner and garner most of the investors’ money.
Finally, privacy concerns could hamper the growth of TaaS. Namely, many people are worried about the data TaaS companies collect from their users. Therefore, this could lead to regulations that may limit the ability of these companies to collect and use data, thus severely impairing their potential.
How to Buy TaaS Stock?
Next, we’ll talk about what you need to do to buy TaaS stocks. If you’re new to the investing scene, you can check out our guide on buying stocks, which can significantly help you when investing in TaaS stocks in Canada.
Open an Investment and Brokerage Account
The first step on your investment journey is to open an investment and brokerage account. You can do this through a bank, credit union, or investment firm. Usually, the employee will ask you to provide some personal information along with income and net worth statements.
Invest by Yourself
If you’re well-versed in buying stocks, you could do well by buying shares directly from your chosen TaaS company. Generally, you’ll have to decide which type of investment account you’ll open, determining the type of stocks you can invest in. Therefore, you can choose between a TFSA, RRSP, or RESP.
Invest Through a Brokerage Company
However, if you’re not sure of your knowledge, it would be better to buy or sell stocks through a stockbroker. Moreover, you’ll want to choose a broker that offers low commissions that will help you save money on your trades and has experience in the TaaS industry.
After choosing your approach, it’s time to start researching TaaS stocks. Mainly, you should be looking at the stock price, the company’s reports and stock history, and the expected growth. As a rule of thumb, TaaS stock prices today generally range from $20 to $33 per share. Check out the ten best stocks to buy in Canada to get a general idea of the market.
Decide how Much you Want to Invest
This step is pretty self-explanatory. Namely, you’ll need to look at your financial situation and determine how much you can set aside for your investment. Make sure buying shares doesn’t leave you penniless, so it’s best not to go overboard with your first purchase.
Invest in Individual or Mutual Fund Stocks
Next, you have another decision to make. Namely, you should consider whether you’d like to invest in an individual or mutual fund stock. As the name suggests, an individual stock is a portion of a single TaaS company, while a mutual fund has multiple companies’ stock in one investment. There is no correct answer, as the choice depends on your preferences.
Decide on Stock Order Type
Of course, when it comes to buying TaaS stocks, you need to decide on an order type. There are two main types of orders: market orders and limit orders. The former will execute at the current market price and allows you to buy stocks immediately, while the latter will only execute at a specific price and gives you control over the stock.
Monitor Your Investment
If you know the first thing about stocks, you’ll be familiar with stock price volatility. Prices can change in the blink of an eye for seemingly no reason at all, which is why it’s essential to monitor your investment and keep an eagle eye on the market.
TaaS is a promising new industry with a lot of potential. Our tips above will be a helpful resource if you’re looking to get involved with TaaS stock. Luckily, you can make a lot of money from this investment and diversify your portfolio with proper research and monitoring.
To buy TaaS stocks in Canada, you’ll need to open an investment and brokerage account. Once you’ve done that, you should research different TaaS stock prices and decide how much you’re willing to invest. Remember to monitor your investment carefully, as prices tend to change unexpectedly.
If you want to invest in TaaS, follow our tips below. You should: open an investment account, research stock prices, decide how much you want to spend, decide on the stock order type, and monitor your investment.