How to Create a Ridesharing App – A Complete Guide

How to Create a Ridesharing App – A Complete Guide

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Last Updated: 29th February, 2024

The global ride-sharing industry has been undergoing transformation, disrupting the traditional business model that was in place for centuries. Earlier, in the 17th century, horse-drawn ride-for-hires were available in London and Paris. Then in 1653, horse-drawn hackney carriages did business and in the late nineteenth century motorized streetcars became popular. Moving forward, in 1891 a taximeter was invented from where the word taxicab was taken. This fare calculating device made the cab drivers adapt their business model as per societal and legislative demands.

In 1897, the world’s first dedicated taxi encompassing a taximeter was built in London. Since then, the taxi industry has come a long way. Moreover, with technological advancements, real-time ride-sharing industry gained ground and companies like Lyft and Uber began to experience phenomenal growth, as they offered services that helped passengers in finding a one-way ride in a short period.

In this blog, we talk about technological innovations, leading players, market trends, and then we’ll move on to understanding the business model of a ride-sharing app. We’ll also take a look at the key features of a ride-sharing app and as an entrepreneur, if you are looking to launch your own app, we discuss in detail the efficacies of custom vs readymade ride-sharing apps and the methods of scaling them to gain better wallet share.

Table of Contents

Surge in Demand and Global Market Overview

The key factor driving the adoption of ride-sharing globally is the increase in demand for cost and time-saving transportation. Additionally, the high cost of vehicle ownership, increasing need to reduce traffic and CO2 emissions for environmental concerns, and government regulations have been promoting ridesharing. As per stats, the global ride-sharing business has grown by 50% between 2019 to 2021 and is expected to reach USD 61.24 billion by 2026.

Ride-sharing Market Overview – Regional Insights

• According to Statista, revenue in ride-hailing and taxi segment in the US is projected to reach USD 78,140 Million in 2022.
• Uber and Lyft make up 90% of the ride-sharing market in the US.
• Americans between the age of 18-29, use ride-sharing apps more often than any other age group.
• In Europe, many cities are adopting low emission zones in line with the Paris agreement as an attempt to reduce carbon emissions.
• The projected revenue for 2022 in Europe for ride-hailing and taxi segment is USD 50,891 Million.
• The projected revenue for 2022 in Asia for ride-hailing and taxi segment is USD 177,414 Million. Overall, Asia is estimated to have the largest market share in 2022.

Top Dominant Players in the Ride-sharing Industry

The ride-sharing market is highly fragmented and competitive in nature and the primary reason is the operators’ ability to use independent drivers. Technically these companies do not provide rides to customers, instead, they connect passengers with drivers and charge for the service provided. Hence, ride-sharing services are arranged on very short notice, usually through a mobile app. And, these applications are impressive as with just a click, any individual can turn into a passenger or a driver. Top players dominating the ride-sharing market are:

Apps Revenue Founded Year
Uber 17.4 Billion 2009
Ola Cabs $110 M 2010
Lyft $3.21B 2012
Grab $687M 2012
BlaBlaCar $85.7M 2006


As the landscape of mobility continues to change, abundant innovation and emerging technologies have provided the ride-sharing industry a front-row seat for expansion. Besides, individuals who wish to stay safe from the threat of COVID-19 eventually viewed ride-sharing as a better alternative to more congested forms of mobility (public transportation) – that made physical distancing difficult. In this section, we talk about the popular trends and the future outlook of ride-sharing. 

Emphasis on Health, Safety, and Reliability

The Covid-19 outbreak has caused operational disruption in the framework of the ride-sharing industry. There is a paradigm shift in the travel and psychological behavior of customers. So ride-sharing companies need to assess the behavioral change in customers’ emotions and sentiments regarding hygiene, safety, security, and more.

To reduce the risk of catching the infection, ride-sharing companies have deepened their ties with healthcare organizations to provide reliable, comfortable, and sanitized transportation. Features of enhanced ventilation, plexiglass divider to separate passengers are also being added. While wearing masks at all times is mandatory, the frequency of an already robust cleaning schedule has also been increased. 

Transition Leading to a Sustainable Transportation

Ride-hailing companies have avidly embraced shared trips. Even passengers are booking taxis as a faster and more convenient way to commute. There is mounting evidence that in densely populated areas passengers are choosing relatively nimble, shared trips. This significantly helps in reducing traffic congestion and offers a city-friendly and sustainable product. Also, many ride-sharing companies like Uber and Lyft are using shared mobility principles that are developed by leading international NGOs for livable cities.

Electrification of Ride-sharing Fleet

Electrification of vehicles is most likely going to be a trend for ride-sharing fleets in the coming time. As electric vehicles are becoming increasingly popular, companies like Uber have started to explore the EV segment. Furthermore, electrification of ride-sharing will help reduce pollution, decrease vehicle maintenance costs, and, above all, lessen dependency on fossil fuels.

Self-driving Cars

We are also likely to witness an increase in self-driving cars as ride-sharing services will soon operate autonomously (entirely); especially considering the number of self-driving cars currently in development. Joining the fleet of Waymo, Uber and Lyft are also said to operate without drivers in the future. This will not only decrease the costs for companies but will also help drivers earn more revenue per hour.

Connected and Autonomous Vehicles

As per reports, in 2022, approximately 54 million new connected vehicles will be on road. This means that these cars have internet services, are connected to each other, and will soon be able to communicate with the infrastructure like traffic lights, stop signs, and more, leading to increased safety on the road.

Navigate the Shifting Mobility Landscape With Your Ride – Share App

Target Audience of Ride-sharing Apps

Ride-sharing industry is rapidly expanding and gaining traction in the market. However, the adoption figures continue to vary by age, income level, and educational attainment. For example:

• Millennials, i.e. the people born between 1980-2000 have used a ride-hailing service, compared with 24% of those who were 50 or older. Likewise, people born in mid-1990s to mid-2000s (generation Z) are tech-savvy and have smartphones with the internet. As a result, they have better access to app-based ridesharing mobility services. So the younger generation understands the benefits of ride-sharing. Hence, they are expected to continue availing these services even when they grow old.
• Similarly, on closer inspection, it was also observed that 70% of people who live in cities and have a yearly salary of $75,000 or more were more likely to choose ride-sharing services over potentially slower or congested modes of transportation. Furthermore, in the USA, individuals who are more educated use ride-sharing services.
• As per stats, 55% of post-university graduates use Uber or Lyft as compared to those with lesser qualifications. Moreover, substantial urban-rural differences have also been observed. This is because many of the individuals with higher education live in urban areas where access to this type of ride-sharing service is available.

Key Benefits of Ride-sharing Apps

The convenience offered by taxi booking apps has made users more comfortable while providing businesses with a vantage point to deliver more value to customers by staying sustainable. Here, we share the benefits of ride-sharing apps. 

Building a Brand

Brand awareness is the most pivotal ingredient towards the success of a ride-sharing business. Companies like Uber, Lyft, and Ola have already established a strong reputation and goodwill for themselves in the market today, and thus, have become brands. Emphasizing credibility, unmatched customer services, and trust via ride-sharing apps can also help in increasing brand awareness. This helps in staying afloat in an era of cut-throat competition. Further, customizing a ride-sharing app with features that riders might like can also make the application more attractive. 

Gathering Valuable Data of Riders

Providing customers with quality services requires you to know them – their preferences and needs. When riders download ride-sharing apps, they log in using their email address or mobile numbers. Therefore, these apps help in gathering valuable data like contact information, location, and more. Additionally, when a ride is booked, other aspects like the choice of a cab, how often it is booked, time and distance traveled, and more can be monitored. All of these details help in sending personalized notifications to riders with lucrative offers like discounts, coupons, and so on, which can help in building a loyal customer base.

Getting Feedback from Riders

Rider feedback and review greatly influence the identity of a ride-sharing app. Ratings and reviews by users help in identifying the areas of improvement and the ones doing well. Subsequently, ride-sharing services are improved further, and as a result, a competitive advantage is gained.

Increased Visibility

In the age of digitalization where most people have smartphones, booking a cab via ride-sharing apps is both easy and convenient. Apps like Uber, Lyft, Grab, have already outclassed the traditional taxi services as they not only provide riders the comfort of transportation at their fingertips but also help businesses to get higher visibility, thereby, increasing the user base. 

Real-time Location Tracking

Real-time tracking is one of the biggest perks of ride-sharing services. By tracking the location in real-time the driver, as well as the passenger, can determine the exact location of each other. In other words, the passenger knows in how many minutes the cab will arrive and the driver is aware of the customer’s pickup and drop-off location. This also results in benefitting the business with reduced operating costs, improved customer satisfaction, and increased efficiency. 

Monitoring Driver’s Efficiency

Ride-sharing apps can help in monitoring the efficiency and productivity of a cab’s driver. Sometimes a driver’s behavior can affect fuel expenditure, vehicle utilization, and customer satisfaction. For example, the driver did not go to pick up the passenger, the ride was canceled, or a longer route was followed, then the needed action can be taken by monitoring the driver.

However, in cases where the driver was rude or unprofessional, then it would largely depend on the customer’s feedback. That said, close monitoring of drivers (which is absent in the conventional type of taxi booking) can greatly help improve the efficiency and success of the ride-sharing business.

Ride-sharing Business Growth with Improved ROI 

The traditional way of taxi booking has been an arduous task. But with the emergence of ride-sharing apps, the cab booking industry went into autopilot mode. Now, customers seamlessly book the cab through a ride-sharing app, get driver and payment details in advance, and upon trip completion make a hassle-free payment. This helps in improving the ROI and leads to the growth of the ride-sharing business.

Provide Unique Benefits to Customers with your Ride-sharing App

Ride-sharing Business Model – A Platform for Change

Bypassing the traditional methods of taxi booking, ride-sharing applications have been gaining popularity. The underlying reason is – digital “ride-sharing” platforms are improving efficiency and providing better transportation facilities while matching supply with demand in a cost-effective way.

Ride-sharing applications have also brought the concept of aggregator business model to fore. Its uniqueness involves building partnerships with individuals who work under the brand of the ride-sharing company instead of building or developing an offering on their own. Being tech-driven, peer to peer, ride-sharing companies also have conventional corporate governance.

In effect, companies like Uber, Lyft have a business model that uses a special algorithm to put ride-seekers in touch with ride-providers. The fares are adjusted as per market conditions. Furthermore, features like trip-tracking and driver rating enhance the transparency offered making it a win-win situation for customers, drivers, and the ride-sharing company itself.

The ride-sharing business model also facilitates vehicle owners to become public service providers, as it gives them the flexibility to drive their own vehicles in areas they choose to work. Features like trip-tracking and driver rating enhance the transparency offered. It also functions without overburdening the service providers with exorbitant registration fees, tariffs, and licensing.

Essential Features in a Ride-sharing App

A ride-sharing app has three panels – passenger, driver, and admin. Listed below are the features for every segment.

Features for Passengers Features for Drivers Features for Admin Other Features
User-friendly sign up portal Driver-friendly registration Heat Maps Analysis ( where the demand for rides is more) Support for various locations
Integration of real-time tracking (to track driver’s movements) Accept or reject a ride request Driver and fleet management Rating system based on user feedback
Electronic payment gateway Built-in navigation for optimized directions Real-time analytics and reports Internet messages (SOS in case of emergencies)
Pop-up notifications to keep users updated Integrated system for receiving payments Rental package management (basic, luxurious, moto, and more) Ability to schedule rides in advance
Hassle-free facility to cancel a ride Every rider’s trip information Promo-code management Regional price monitoring

Custom vs Readymade Ride-sharing Apps

The success of ride-sharing businesses like Uber, Lyft, and Grab has made numerous entrepreneurs interested in the ride-sharing business. In a bid to meet these requirements, ride-sharing app development companies are offering two types of solutions. These are:

  • Custom Built Ride-sharing Apps
  • Readymade Ride-sharing Apps 

Custom Built Ride-sharing Apps 

Custom apps allow the building of a ride-sharing app as per tailored requirements of a business or an entrepreneur and at a suitable pace. These apps are built from scratch providing the flexibility of:

  • Customization- Features and functionality can be customized; offers the choice of having a unique design as per business requirements.
  • Scalability- Custom ride-sharing apps are scalable.
  • Added Security- Developers in these applications can use encryption to protect sensitive data in terms of drivers’ and passengers’ personal information. 
  • Cost- Custom ride-sharing apps can cost more money (as per requirements) but the level of UX and functionality incorporated will be more refined.
  • Time- The time-to-market of a custom ride-sharing app depends on the app’s functionality and complexity. 

Readymade Ride-sharing Apps

Pre-built software can aid in bringing the best results for your ride-sharing business without taxing your patience. You do not need to do anything – just buy, install and start using your app. A few factors contributing to the success of readymade ridesharing apps are:

  • Time- Pre-built ride-sharing apps are built for those who consider time as their priority. No development is required so the time-to-market is less. 
  • Cost-Efficient- If budget is a constraint, no solution is better than a pre-built one. These apps are built with the purpose of catering to multiple clients so the number of complex features and functionalities is limited. This reduces the development time and the cost.
  • Hassle-free: A readymade ride-sharing app saves the company/entrepreneur from the hassles of project management and development. 
  • Customization: Not all ride-sharing apps are fully customizable as they might lack the technical capabilities needed to customize.
  • Scalability: Not all pre-built apps are scalable for the same reason as covered in the above point.

Our Recommendation

As mentioned above, ready-made ride sharing apps are cost-effective and the time-to-market is less. Hence, a ready-made ride sharing solution like VivoCabs is perfect to start your online ridesharing business. Designed and developed by FATbit Technologies, VivoCabs is a white-label taxi booking solution that comes equipped with a wide array of features such as fare estimator, multiple payment gateways, geo-fencing, SOS for users, and much more. Rider and driver mobile apps (Android and iOS) are also available. 

Key Highlights of VivoCabs 

  • Fully Customizable and Scalable 
  • Rider and Driver Apps (Android and iOS)
  • Multiple-Payment Gateways 
  • 12 Months of Free Technical Support 
  • GDPR Compliant

Kickstart your Ride-sharing Business with VivoCabss

Scaling a Ride-sharing Business – The Techniques

It is known that startups gain a lot of attention, however, with evolving customer needs and demands, it is important for ride-sharing businesses to scale up. While the focus should always be to enhance the passenger’s ride-sharing experience, expansion through adjacencies, cross-industry collaboration, and in-app mobile marketing can efficiently scale the ride-sharing businesses to gain a competitive edge.

Expansion Through Adjacencies

To remain sustainable and profitable, ridesharing companies should chart a course to expand into adjacent markets. For example, Uber leveraged the in-market (core market) with existing customers by delivering food through UberEats. The company has also incorporated a pickup and go feature into its app, that allows passengers to order and pick groceries or meals while en route to the destination.

Cross-industry Collaboration

The global market is made up of several independent industries, each having its own supply and demand. However, this method is outdated in many ways as new collaborations are straddling the boundaries. As Uber and Lyft have been the premier in the space of ride-sharing industry, they already have a huge user base that makes them attractive to bigger brands who are looking for partnerships as a part of their marketing strategy.

In the past, Uber has partnered with Hilton, Spotify, Pepsi, BMW, and so on. The passengers of Uber were also treated to free trips in BMW 7 series to promote the new car before it arrived in the U.S. showrooms.

In-app Mobile Marketing – Promotion and Referrals

With numerous ride-sharing apps getting introduced to the stores every other day, promotions and referrals offer a new vantage point that empowers businesses to outmaneuver their competitors. Hence, most ride-sharing apps use referral marketing and promotions to deliver more value and boost app downloads.

Looking to Scale your Ride-sharing business?

Final Words

Ride-sharing is quickly gaining momentum by harnessing the power of digitalization. Entrepreneurs, startups, or companies can benefit greatly from the changing ride-sharing dynamics. Further, innovation will drive the future of mobility. So if you are looking to start or scale a ride-sharing business, get in touch with us. We at FATbit Technologies comprise a multidisciplinary team, that blends their deep domain expertise with emerging trends, to deliver innovative ride-sharing applications.

Disclaimer: The Blog has been created with consideration and care. We strive to ensure that all information is as complete, correct, comprehensible, accurate and up-to-date as possible. Despite our continuing efforts, we cannot guarantee that the information made available is complete, correct, accurate or up-to-date. We advise - the readers should not take decisions completely based on the information and views shared by FATbit on its blog, readers should do their own research to further assure themselves before taking any commercial decision. The 3rd party trademarks, logos and screenshots of the websites and mobile applications are property of their respective owners, we are not directly associated with most of them.

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