#Guides | 21 min read | Updated: 3/26/2021

How to Create a Ride Sharing App

Yaroslav Titenok , CEO of Sloboda Studio

Taxi! … Taxi! … Well, that’s pretty tiring.

How to Create a Ride Sharing App

It is true that hailing a taxi in 2020 seems obsolete.

Instead, there are ride-sharing apps that are doing a great job at picking someone up at point A and dropping them off at point B.

Overall, it is predicted that the global car-sharing market will be worth $218 billion by 2025, with a growth rate of 20%.

Fact: in 2015, only 15% of adults in the USA used ride-sharing apps. In 2018, the number rose to 36%. This means that the market is growing and more ride-sharing apps are appearing. Therefore, it may be a good time to start your own ride-sharing app.

In this article we will talk about how to create a ride-sharing app, the ride-sharing market, top competitors, monetization models, and core features. Basically, it’s a full guide on how to start your own ride -sharing app.

What is Ride Sharing?

The ride-sharing industry is a big and important part of the sharing economy in general. 

The sharing economy is an economic model that matches service or product owners with consumers via technology.

Unlike the traditional model, where private companies actually own equipment, in our case of cars, the sharing economy model only facilitates interactions between individuals.

Ride sharing is a service that helps passengers to find a one-way ride in a short period of time.

With the ride-sharing model, the drivers are actually car owners and they are not registered with any taxi service company. The drivers are usually independent contractors. That is why ridesharing companies don’t withhold taxes from drivers’ salaries, offer flexible hours, and allow drivers to work overtime.

Ride Sharing App market

Uber prevails in the global ride-sharing market, with a market share of 37.2% in 2019. The second best is DiDi, with a market share of 32.4%.

The term ‘ride sharing’ suggests that passengers are sharing a ride to a certain destination. However, in reality, only a few use such a feature; most  passengers prefer to ride alone. In such cases, ride sharing may seem like it doesn’t differ from taxi services; nevertheless, there is a big difference.

Difference Between Ride-Sharing and Taxi Services

Mobility

With ride sharing, passengers can find a ride via an app. A ride-sharing app finds the closest available car and matches it with a passenger. Passengers know instantly when a car will arrive and, based on this information, can accept or decline the ride. They don’t have to wait for a taxi to appear on the street to hail it or call a taxi company and wait 15 minutes for the car to pick them up.

Price Variety

With taxis, passengers don’t get to choose how much they want to pay, plus they usually don’t even know how much the ride is going to cost them. 

Ride-sharing apps, first of all, allow passengers to choose what type of car they want – a budget or a luxury one. Secondly, passengers are always informed about the ride price before actually getting into the car.

Payment Methods

Ride-sharing apps let users pay with a credit card and not have to worry about having enough cash. Also, most ride-sharing apps allow users to leave tips, which can also be paid with their credit card.

How Ride Sharing Apps Work

There are 3 main types of apps where passengers can share either a ride or a car:

  • Ride-sharing apps

With ride sharing, passengers determine the destination. Ride sharing doesn’t always have to be shared with other passengers – it can just be a great alternative to a taxi. Although, the main benefit of ride-sharing apps for passengers is that they can split fares together.

Examples: Uber, Lyft, DiDi, Grab, Curb.

  • Car-pooling apps


With car pooling, the driver is the one who decides on the destination; the passengers are just riding along to the same destination – often they’re intercity trips. Car pooling can be for free or for a fixed fee.

Examples: BlaBlaCar, Carma Pooling, Waze Carpool.

  • Peer-to-peer car-sharing apps

Peer-to-peer car sharing is a practice where a car owner or a company that owns cars rent out their vehicles for a fixed price and a certain time frame.

Both renters and car owners can take advantage of such a model since renters don’t have to go to a certain car service to rent a car. Renters can find a nearby car and car owners can make a profit when they’re not even using their car.

This type of ride sharing is especially popular with travelers.

Examples: Getaround, Turo, Zipcar, RelayRides, Hertz.

Top 5 Ride-Sharing Apps

There are quite a lot of key players in the market of the ride-sharing economy, whether they are worldwide or local. In the USA, the key players are Uber, Lyft, and DiDi; in Europe, BlaBlaCar. Let’s take a closer look at them.

Uber

Uber was originally founded as UberCab in 2009 by Garrett Camp and Travis Kalanick. Initially, UberCab was launched as a luxury car ride service. An Uber mobile app was officially launched in 2011 in San Francisco.

Uber expanded rapidly on the global market, acquiring ownership staked of well-known ride-sharing companies all over the world, such as DiDi, Grab, and Careem.

In 2019, Uber had 110 million users monthly in the United States. Uber operates in 69 countries, with more than 7 billion trips carried out so far.

In the fourth quarter of 2019, Uber generated gross bookings of $18.13 billion worldwide. This number dropped to $10.22 billion in the second quarter of 2020 due to the pandemic.

How to Create a Ride Sharing App: Uber

Uber Homepage

Lyft

Lyft is another major San Francisco ride-sharing company that was founded in 2012, the year after Uber. This company operates in 644 cities in the USA and 12 cities in Canada. Lyft has a 30% share of the market, making it the second-biggest player after Uber. 

In 2019, Lyft generated more than $3.6 billion in revenue worldwide.

How to Create a Ride Sharing App: Lyft

Lyft Homepage

DiDi

The Chinese ride-sharing company DiDi was also founded in 2012 in Beijing. DiDi raised $21.2 billion of funding in total. In 2016, due to Uber’s expansion to China, DiDi decided to buy out Uber China for $35 billion. In its turn, Uber acquired a 15.4% stake in DiDi.

How to Create a Ride Sharing App: didi

DiDi Homepage

Grab

A Singapore-based ride-hailing company, Grab is a key player in the Southeast Asian market. This service company was founded in 2012 and works in over 55 cities across Southeast Asia.

An interesting fact about Grab is that the company works with both private car owners and taxi drivers.

Grab raised $10.1 billion of funding in total. Concerning future investments, Alibaba is planning to invest $3 billion in Grab in the very near future.

How to Create a Ride Sharing App: grab

Grab Transport Page

Curb

Curb is one of the youngest ride-sharing companies in the world, and particularly in the USA. It was founded in 2007 in Long Island City, New York. The Curb mobile app was released even before the Apple App Store was created. Now, it is ranked in the Top 50 for “Travel & Tourism” in the App Store and Google Play. Overall, Curb raised around $40.7 million in 13 years.

How to Create a Ride Sharing App: curb

Curb Mobility Page

Steps on How to Start a Ride Sharing Business

It is easy to get stuck in the idea stage of a project.

Knowing how to make a ride-sharing app can be an eye-opener since you will have an idea about the cost, features, and overall product development process.

We’ve gathered the key steps that all our customers have always taken in order to set the production in motion.

Analyzing the Competitive Landscape

The first thing that all startuppers and entrepreneurs should always do is research their competitors. Who knows? Maybe your idea has already been implemented the way you see it to be. The competitive analysis gives an insight into the market, competitors’ unique value propositions (UVPs), and how well they’re doing. These are essential things to know before building a startup from scratch.

Make sure to research both direct and indirect competitors. Direct competitors are the ones who offer the same products/services to the same target audience as you do. Indirect competitors are the ones who offer not the same products/services as you do but to the same market. In both cases, you need to come up with a UVP.

Identifying Your Product’s UVP

What we learned after building an Uber-like ride-sharing app: there is no way you are going to succeed if you’re building a complete Uber clone. Answering the question about how to start a rideshare company, remember to make your service unique.

The unique value proposition defines the way your company and product/service is different from the competition. From studying the market and competitors, it is possible to see the blanks and challenges that your product can help fill and solve – that’s where your unique value proposition will come from.

Determining the Monetization Model

There is no way a business is going to develop and grow unless it is monetized. Therefore, it’s important to have a ride-sharing business plan before you start to develop an app. Determining a monetization model early on may save you a future headache. Below, we talk more about ways to monetize a ride-sharing taxi app.

Selecting a Development Team

Hiring an in-house team or outsourcing is the main question here. It all depends on your budget, time, and location.

Developing Your Minimum Viable Product (MVP) 

When thinking of making a ride-sharing app, the smart move in terms of money and time would be starting by creating an MVP. But before taking the plunge, we advise choosing the core feature for your ride-sharing app and prioritizing them.

Below you will find an extensive list of main features for an Uber-like app.

Launching the Product

After building an MVP for 3-6 months, it will be possible to launch the ride-sharing app. This stage determines how well the product is received on the market and whether there is a real request from your target audience for ride-sharing services.

Getting Customers’ Feedback

When the product is launched, it is vital to get as many customers’ feedback as possible since, based on them, you will determine where to pivot and make changes both to the technical and business sides of the ride-sharing app.

Improving Your MVP 

Significant product improvements can only happen after customers’ feedback is gathered. From there, you can shape up your product and build the best version of it.

Developing a Fully Featured Product

Scaling your ride-sharing app is something you should think of ahead of time. However, only do it when the right time comes.

Here are a few tips on building a fully featured product:

  • If you have plans to scale your MVP, our advice is to make sure to scale the app at the right time. The app’s traffic should be one of the main indicators for scaling.
  • We suggest making sure to choose technologies and a way of building a ride-sharing app so that it would be possible to scale the app further down the road.
How to Create a Ride Sharing App

Business and Monetization Models of Ride-Sharing Apps

A business model of the sharing economy – in particular, the on-demand ride-sharing model – has made it possible to connect supply and demand in an easy and seamless way. 

What Uber created at the beginning of their work and further down the road has set the tone for other companies. Uber created such a model where there was a win-win situation both for customers, drivers, and the company itself. 

Let’s look into the main monetization models that Uber-like companies use.

Commission Fees

This is the number one revenue model for any kind of ride-sharing app. A commission-based revenue model is a monetization model where a service fee is charged from each payment transaction.

A ride-sharing app can charge either the passenger, or the driver, or both. For instance, Uber charges the driver 25% and the passenger pays a sales tax per ride. Lyft charges the driver 20%. BlaBlaCar collects a service fee, including VAT, from passengers.

Advertising 

Advertising is a way to make a profit out of putting ads from third-party providers in an app. It isn’t used by many ride-sharing apps due to fear of losing the users by bombarding them with advertising.

Partnering

Collaborating with other companies is always a good way to build relationships with trusted brands, get more exposure, and earn money at the same time. 

That’s what Lyft did when it partnered with BMW to promote its new BMW 7 Series. Lyft offered free rides in the BMW 7 Series for its passengers in selected cities and profited from partnering with one of the biggest car manufacturers in the world.

How to Create a Ride Sharing App: Monetization

How to Create a Ride Sharing App: 10 Core Features 

There are 2 ways to build a ride-sharing app: 

  1. build two separate mobile apps for drivers and passengers 
  2. create an all-in-one app. 

Let’s look at the example of an all-in-one ride-sharing app and its main features.

Even if you decide to build an all-in-one ride-sharing app, it’s vital to understand that the app functionality will differ depending on who is accessing it.

Registration & Profile

For passengers:

Any user journey of a ride-sharing app begins with users registering in it. So, it is advisable not to overcomplicate the registration process with unnecessary components and information. The best thing to do is to ask passengers to register with their phone number; in some cases, social media can be a great tool for registering your passengers.

In terms of profiles, users should be able to upload their photos; enter their name, phone number and payment method; view their payment history; and view ratings that they leave on drivers.

If your brand is aiming to give users a custom approach, then allowing users to specify their requirements for a ride (such as a nonsmoking driver, no music in a car, only female drivers, and so on) will be worth it.

How to Create a Ride Sharing App: Uber Registration Feature

Uber Registration Feature

For drivers:

In order to become drivers, users should be advised to submit an online tax number verification and get your company’s approval. In addition, they upload their personal information including contacts, names, photos, and any other information that your company may need. Drivers have to determine their work schedule and switch on to an online mode once they start working.

For personal profiles, we advise building the app in such a way that drivers can track their trips, earnings, tips, reviews, and feedback.

Notifications & Communication

For passengers:

Passengers tend to be impatient when waiting for a ride, since it’s clear that they have to be somewhere, probably soon. Notifications save your users from constantly checking the driver’s location. We suggest sending push notifications about an accepted ride, a canceled ride, a possible delay, or payment issues.

Communication can occur inside and outside the app. Usually, drivers or riders call each other to find out any specific details; however, it’s also better to implement a chat system. It would be great for passengers to be able to leave comments on a future ride and to text a driver directly.

How to Create a Ride Sharing App: Uber Notifications Feature

Uber Notifications Feature

For drivers:

The same rules apply to notifying drivers about possible ride opportunities, cancellations, and ride details.

Booking

For passengers:

Here’s how booking a ride should work:

Step 1: Before requesting a ride, users need to enter their payment information if they haven’t indicated it in their profiles. Users should be able to save their payment details for future rides.

Step 2: For booking a ride or a seat in a car, users need to enter their current location and their destination. 

Step 3: The next step is choosing a car type and a preferred ride cost. These preferences depend on what factors you would like to include in the booking process.

By the way, introducing a different approach to a booking process may actually attract more users to your application. So, make sure to think of your Unique Value Proposition (UVP) before building a ride-sharing app.

Recommended: The Project Discovery Phase or How to Avoid Failure

One thing must always stay the same: users should always be able to see the ride cost before accepting a ride.

How to Create a Ride Sharing App: Uber Booking Feature

Uber Booking Feature

The ride price is calculated based on the pickup and dropoff locations. Lyft, for example, uses heat maps to see where the highest demand for rides is, and thus charges more for rides in that area.

For drivers:

Drivers should only be able to accept or decline a ride. The time for accepting a ride should be limited. For our Uber-like app for scooter rides that Sloboda Studio helped to build, drivers are able to accept a ride in 10 seconds, or else the request goes to another nearby driver.

My Rides

For passengers:

There are users that use ride-sharing apps quite often, so it is important for them to see the complete history of their rides. Instead of going to the personal profile, we suggest creating a separate “My Rides” tab, where passengers can view the number of rides they have completed and their details, such as price, driver, destination, and payment details.

How to Create a Ride Sharing App: Uber Your Trips Feature

Uber Your Trips Feature

For drivers:

The same logic and functionality should be applied to the driver’s side of an application.

GPS Location

GPS is used for detecting someone’s location. By using GPS in a ride-sharing app, users and drivers will be able to save time by not needing to manually enter their locations.

In addition, riders can use a feature such as real-time tracking. Real-time tracking allows riders to track a driver’s exact location. Often, a GPS can take drivers on the wrong route, so riders can always call a driver and direct them to the right location and route.

How to Create a Ride Sharing App: Uber Geolocation Feature

Uber Geolocation Feature

Payments

Payments should be processed before completing the ride. This way, even if a passenger decides to cancel a ride at the last minute, your driver won’t lose the money.

If your ride-sharing app will accept cash, then this should be clear before a passenger actually books a ride.

Usually, ride-sharing apps use third-party payment providers for securely processing payment transactions. As an example, Uber chose Braintree,; however, there are other popular and trustworthy payment providers, such as Stripe and Paypal.

Recommended: Stripe vs Braintree: How To Choose a Payment Provider for Your Business

Tipping a driver is a great feature that should not be overlooked, as we all are accustomed to tipping people for the provided services. In case of a cashless payment, we advise giving passengers an option to tip a driver after completing their ride inside an app. Passengers choose on their own how much they want to tip.

Reviews & Ratings

Ratings and reviews are a two-way street. We encourage you to allow both drivers and passengers to rate each other. This way will give you a clearer picture of who is doing a bad job and who should be banned. However, not all ride-sharing apps allow review and rating of passengers.

Passenger feedback gives a fuller picture of a driver’s behavior and driving skill. Nobody would want to get into a car with a driver who swears a lot or who is extremely chatty.

How to Create a Ride Sharing App: Reviews Feature

Uber Reviews Feature

Localization

If you are building an international ride-sharing app, then the ability to switch between languages is a must-have. Even if your company only operates in one country, it is advisable to make a multilingual ride-sharing app since there is a high probability of foreigners using your app.

Our advice: don’t go overboard with languages, make an app based on its location of operation, add English, and any other official language that is spoken in that country.  

Admin Panel

Our advice is to build an admin panel as a web app. It’s just easier for a company’s staff to manage the processes from a computer. Admins usually have full access, they manage both passengers and drivers, track payment transactions, and view statistics.

Future of Ride-Sharing Apps on the Market of Sharing Economy

The total global revenue from the sharing economy market is forecasted to reach $40.2 billion in 2022.

Ride Sharing Apps Growth Forecast

A global ride-sharing market is predicted to grow by over 50% between 2020 and 2021. 

In general, the ride-sharing market value is expected to amount to approximately $117 billion in 2021.

Though the ride-sharing market is growing and expanding, the market value of Uber will be slowly dropping. There are two reasons for that. 

Firstly, Uber has lost its advantage of being one of a kind and a pioneer in the ride-sharing industry. There is big competition on the market, and Uber is no longer the only dominant ride-sharing company globally.

Secondly, in the last few years, Uber has been sued and criticized for the company’s employment rules a lot.

The fact that Uber doesn’t classify its drivers as employees, but more as independent contractors, has been both an advantage and a disadvantage to the company. Nevertheless, in 2019, more than 52% of Lyft drivers and almost 45% of Uber drivers reported being satisfied with their ride-sharing company.

Driver satisfaction with Lyft in the United States from 2017 to 2019

Future of Ride Sharing Apps

Source: Statista

All being said, the ride-sharing market is moving forward to using self-driving cars and expanding their spheres of operation. Uber started doing research on autonomous vehicles in 2015. Since then, the company has tested numerous cars and poured millions of dollars into the idea and its execution. It was mentioned that the costs on Uber‘s self-driving unit could sometimes reach $200 million in a single quarter.

Pros and Cons of Building a Ride-Sharing App from Scratch

Custom development allows you to begin building a ride-sharing app the way you want and at a pace suitable for you.

Pros of Building a Ride-Sharing App from Scratch

Customization

By starting to create a ride-sharing app from scratch, it becomes possible to create customized features and a design unique to the app.

Scalability

Time-to-market can be somewhat of an issue for your product. That’s why your goal would be to launch it as fast as possible. This means that you won’t have time for expanded functionality, only the core features.

But you know what? When the time comes to broaden the app’s functionality, there won’t be any difficulties with it since custom ride-sharing app development allows you to be quite flexible in terms of features and product architecture.

Security

Storing drivers’ and passengers’ personal information is always a sensitive issue. With custom development, a team of developers would be able to use encryption to protect the data. 

Cons of Building a Ride-Sharing App from Scratch

Cost

How much does it cost to create a ride-sharing app? It’s true that custom development costs more money than some ready-made solutions, but it provides users with a completely different level of functionality and UX.

Even if you decide to use a ready-made solution at first, you would still  need to scale your ride-sharing app at one point. And the fact is a ready-made solution is not always scalable. So, it would be necessary to rebuild it from scratch anyway.

Time

Three to six months – that’s our average estimate for the product’s MVP. Needless to say, it all depends on the app’s functionality and complexity.

How Much Does It Cost to Start a Ride Sharing App

Required features are a key factor in pricing and the amount of time necessary.

There are a few factors that influence the development costs:

Development origin 

The development origin depends on whether you are going to hire an in-house development team or outsource. Creating a team in the USA or UK would be more expensive than outsourcing ride-sharing app development to Eastern Europe, for instance.

App’s complexity 

Answering the question about how to start a rideshare business, remember to take its complexity into account. The app’s complexity is based on the number of features and the technologies used.

Design requirements 

Your app’s design will be making the first impression on the users, along with the app’s speed and other factors. Nevertheless, it’s your choice of how fancy you want the app to look.

A word of advice: don’t concentrate too much on the app’s design. It is quite possible that in the future you will be doing rebranding anyway, and spending a lot of time and money on design seems like a big waste, especially during the MVP stage.

Support and maintenance

Most apps usually need tech support after launching. There is always something to work on, the only questions are how critical it can get and how much it is going to cost.

How to Create a Ride Sharing App

Our Experience

Split

In 2018, our team started building the first scooter ride-sharing app in Los-Angeles. Split is a platform that connects freelance drivers managed by Split with people who need to go from point A to point B. Unlike Uber, Split owns scooters and hires drivers as the company’s employees.

Creating a Ride Sharing App: Split

We started building Split from scratch by creating an MVP first. The client’s goal was to build an MVP for proving the hypothesis of the relevance of scooter rides in LA. 

Our team implemented the following functionality:

  • Admin panel
  • Payment system
  • Ride requests & ride processing
  • Push notifications
  • Feedback

Final Thoughts

In brief, ride sharing has become a typical activity for those in need of a ride. “I’ll Uber it” is now a standard phrase that you hear at every party or gathering.

The global ride-sharing market is experiencing big growth. More local ride-sharing apps appear aiming to take over the market. With this in mind, we created this article that has everything you need to know about creating a ride-sharing app. 

There are 9 tips on how to build a ride-sharing app that we highly recommend you check out, some of which are market and competitors’ research, UVP, revenue models, and so on.Besides, we have already built an Uber-like mobile app for one of our clients and have a lot to share about our experience. Contact us to gather some useful insights from a primary source.

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