Today’s Uber-like apps don’t always have something to do with taxi services. They’re everywhere in various spheres of life. On-demand platforms are taking over our everyday life. And each service somehow has its own base of loyal and engaged users. For example, a babysitting app which comes in handy for many users.
So what’s the secret of Uber for X's success? How to start an Uber business, and which model to choose? What is Uber's business model canvas? All that and a bit more about Uber-like services, starting an Uber business of your own, and making a go of it – in our guide. Let’s #MoveForward!
What is Uber for X?
In Uber for X, ‘X’ means any deliverable service in the market. How does it work? First, customers connect with service providers by placing orders via a mobile app or website. Then, the provider looks through and accepts the request and delivers the service if everything works for them.
In different Uber-like apps, connecting buyers and service providers sometimes takes more than pressing a button. But that’s still the main concept of it. Mostly, Uber for X platforms has a variety of in-built filters making the search process very fast and convenient.
If you're here to find out how much Uber-like app development costs, take a look at our guide
For example, to get from point A to point B all Uber users have to do is to place a request and wait for matching with a driver. Few minutes – and the car’s right at the corner.
Now, let’s find out what actually makes the service this fast, convenient, and affordable.
Business model explanation
Uber for X business model is a so-called two-sided marketplace. Riders generate the demand, drivers supply it, and Uber acts as the facilitator providing a convenient and easy-to-use platform.
As no third party prevents these two sides from working with each other, the platform collects a fee from both customers and service providers. (We’re going to take a closer view of their revenue sources later on.)
What's remarkable is that Uber doesn’t hire drivers. It partners with them. Drivers choose their own schedule and the number of hours they're ready to work, and they remain under nominal control. Drivers have all the right to accept or decline the contract terms, and they can choose what period to collaborate with Uber.
As for now, more and more people turn to on-demand platforms like Uber instead of good old city services. Why is that? Uber offers a unique value proposition to both parties which makes the service affordable to use and profitable enough to work for.
Besides, with each next driver or rider joining the platform, the service works better and better for existing users.
For Uber's case, the more drivers and riders they have, the better pickup times and the lower prices are, customers write better reviews, and all this ultimately leads to increased revenues for the marketplace.
Reasons why riders choose Uber
Uber-like Business Ideas
Uber for X models work for various business categories, showing the best result when:
- People need quick help with tasks they don't have time for (walking a dog, house-cleaning, make-up or hairdressing);
- Existing services work too slowly, so there's a need for an alternative (food delivery, trip accommodation, booking a massage therapist).
But what are the industries Uber-like business ideas work best for?
Modern busy people value food quality and taste and how fast it’s cooked and delivered. Besides, many are concerned with eating healthily. All that allows Uber for X platforms to rise and shine.
For instance, Glovo (a Spanish startup) promises to deliver chargers, smoothies, groceries, and food from city restaurants in just a few minutes. The service also delivers food items from local supermarkets and grocery stores, charging 30% of the total cost of the order.
Other well-known examples include:
UberEats website for food delivery
Office workers, managers, and young parents barely have time for cooking (or using one of the delivery services). Not to mention house duties like laundry, bathroom cleaning, vacuuming, dog walking, etc.
Once these people reach a certain level of income, they're looking for someone to take care of their homes, chores, pet duties, and even laundry!
Check our 'Guide to Creating an Uber For Laundry App' for all the details on this promising niche!
Wag! is a hit-parade platform that helps users find dog-walkers when they don't have time to walk their pets. You just book a person who is qualified enough for 'dogsitting' right away or beforehand. Besides, you can always track the dog using a GPS tracker, or just ask the person to send some pictures.
Famous ‘housework killing’ apps are:
Wag! is the leading platform where people hire dog walkers
Finding a personal doctor is very challenging, but on-demand platforms make the life of wandering patients much easier. Sure, doctors can't yet make a diagnosis without proper tests, still, a plain consultation is something apps and websites work for.
DoctorOnDemand's probably the best know platform that allows people to consult with a physician, pediatrician or psychologist via video calls. Moreover, they offer treatment programs and plan to help manage specific health issues.
DoctorOnDemand remains the leading on-demand platform in medical consulting
Transportation and logistics
Uber, Lyft, Bolt (former Taxify), and other on-demand car services are doing great in driving people to places. But when it comes to more – or less – sophisticated cargo, any UberLUX car won't be enough. Luckily there also are Ubers for logistics (Lalamove), packages.
Take a look at our 'Uber for trucking app' guide to speed up your business with on-demand trucking platform.
Lalamove delivers cargo with lorries, vans, and 5.5 tons trucks. It's an Asian company that competes with big players and does it well. What's more, Lalamove's not shy to show their rates clearly on their website, including the list of available vehicles.
Uber offers an entirely automated way of interaction. Passengers don't communicate with dispatchers to get a ride, cashless payments, a feedback system, and customer support -- all these services are available through the app or website. Driver-partners also have an automated experience.
Lalamove - best solution for logistics
How to Start a Taxi Business Like Uber?
First, here is a short guide on how to start a taxi service like Uber:
- Do market research and choose a business & revenue model
- Choose the field for your Uber business
- Form a USP and define business goals
- Identify the buyer's persona and map out the consumer's journey
- Get acquainted with the legal matters
- Select reliable technical partner
- Plan your budget and initial investments
- Define required MVP features
- Work out your marketing and promotion strategies
And now, let’s review these steps in more details.
1. First comes the market research
Before diving right into the details of how to start uber business, it’s worth doing market research with all the money risks and other future challenges.
To get this right, when starting a business like Uber, owners hire experts that can help with the economic analysis. With a thorough review of cost, possibilities, and options, it may not take long to return the investments.
Besides, be prepared to face a number of competitors that run their service better. The demand for on-demand platforms only grows, so lots of startuppers have adopted this way of running a business. Thus, it's a good idea to check on the main competitors: which unique features and offers they have, and which leave for you.
Another important initial step to start Uber business is deciding to improvise and adopt any business model that works for them and guarantees a return on investment, efficiency, and flexibility. We’ll discuss common options in more detail further.
2. Let’s choose the field
Uber's taxi model may be the most popular, but not the only option. As we’ve already covered the most profitable opportunities above, here comes the short summary list of possible fields:
- On-demand food delivery service
- Beauty services and salons
- On-demand mechanic
- House chores & babysitting
- On-demand transportation
3. Form a USP and define business goals
To compete successfully in the marketplace, define a unique selling proposition after researching your audience and your main competitors. Then, consider what you can do to attract customers and what superior services you can offer them.
It is also critical to determine what goals you want to achieve with your solution. Consult with your team and define the main objectives of your business that you want to accomplish by starting a Uber business.
4. Identify the buyer's persona
Buyer personas are images of your ideal customers based on research. They help you focus your time on qualified leads, guide product development to meet the needs of your target customers and align all the work in your organization (from marketing to sales to service). To identify buyer personas, you must go through the following steps:
- Research demographic information. Determine the age, gender, and geographic location of your target customers.
- Identify issues. Find out what pains your buyers will be able to solve with your solution.
- Identify their priorities. You should also find out how ready your target audience is for the solution you will provide them to see if it will be in demand.
- Find out about their concerns. Research why customers may doubt your solution would be best for them, so you can convince them to choose your service.
- Identify their channels of information. Find out what sources your audience can get data about your app from to have insight into their sales channels.
- Identify their buying process. Map out the buyer's journey to understand their steps in the decision-making phase of choosing a service.
5. Mind the legal matters
The legal entity defines how big the company's going to be (and may be). Currently, the choice for a taxi service lies between a general partnership or limited liability company.
- A general partnership is the best business structure for a small scale service company. It works for people that are just starting out and have a moderate amount of seed money.
- In case the company is to grow large and serve both corporate and individual clients all over the USA or other countries, LLC (Limited Liability Company) is a perfect choice. Limited liability companies are simpler and more flexible to operate, and if something goes wrong – it's only the invested money that will be at risk, not partnerships.
6. Select the reliable IT partner
An experienced software provider will help you understand how to start an Uber-type business and create a competitive software solution for you. The most cost-effective solution is to cooperate with an outsourced IT partner. When choosing a tech vendor, pay attention to the following points:
- Provider’s region and team’s hourly rate
- Customer reviews on platforms such as Clutch and GoodFirms
- Portfolio with previous development cases
- Information on the company’s blog and website
A skilled software provider can help with technical issues and solution development. Note, that you can also turn to technical partner for the help in research, and the rest of the previous steps to start Uber business.
7. Plan your budget
No less important step to successfully start your own Uber business is budget planning. This way you can anticipate your expenses and prevent unexpected costs impairing your plans. To do this, it is worth considering what processes you will need to invest in:
- Conducting market and target audience research
- Preparation throughout the Decision Design and Discovery Phases
- UI/UX design
- Development and testing
- Release and technical support
- Advertising and marketing
8. Think of MVP features
On-demand service is quite an expensive project to build. Especially for the Uber platform that is made of three apps:
- The admin panel
- The app for drivers
- The app for customers
So if you’re on a tight budget, the best solution would be to launch an MVP first.
For instance, the app for drivers includes the following necessary features: delivery reports, route optimization, ‘accept/cancel order’ screen, earnings screen, etc.
As for customers, they take advantage of features like ride cost estimation, geolocation & routing, direct app payments, etc.
Finally, the admin panel is used for managing both users and drives, payment, promotions, and many more.
Your software provider will help you to identify the list of MVP features for your app, that will suit your business goals and meet your needs.
9. Work out your marketing and promotion strategies
What’s the use of the service no one heard about? Remember that when it comes to advertising, everything's fair. If you have some extra money, you may start with distributing handbills or advert spots on newspapers, TV, and radio. But if there's an issue with finances, choose the world wide web as the main promotional channel.
Influencer marketing, social networks like Facebook, Twitter, Instagram, YouTube, and Google ads – when it comes to online promotion, the possibilities are endless. The main trick is to stay within the budget.
How to Start Uber Business: Choosing Revenue Model
You will surely think about how to start a company like Uber and make it profitable. Among the revenue strategies are:
- Commission-based revenue. After the passenger pays for the ride, Uber transfers the funds to the driver, charging a commission of 15-30% (depending on the region) in advance. This model is used for Uber Taxi Services. Uber Eats also charges a 30% commission from the restaurant partners for each order.
- Delivery-based revenue. There are three types of fees: pickup fee, delivery fee, and distance fee (per mile). Amounts may vary depending on locations, distances, and availability of drivers. And Uber will take 25% of the total sum. Besides that, for orders cheaper than $12, Uber will charge a $2 fee, which they call a "small orders fee. This model is used for Uber Eats.
- Advertising revenue. Uber services also earn income from exclusive promotions on the app. For example, Uber Eats offers restaurants to pay special commissions and fees to be placed higher on the list and attract more customers.
- Subscription-based revenue. Uber also offers to purchase a subscription to Uber One, which costs $9.99 per month or $99.99 per year. Uber One members receive a $0 Delivery Fee plus up to 10% off eligible orders in restaurants and stores marked with the Uber One icon. In addition, subscribers will receive $5 in Uber Cash on eligible deliveries. They'll also get most rides at a 5% discount.
Main sources of Uber income
Note that you can use one of Uber's monetization models or combine several ones.
Uber Business Model Canvas
Now, if you are wondering how to start your own Uber business, first of all, you need to understand your customers, business goals, and possible issues.
Alex Osterwalder's Business Model Canvas is the best way to represent the company's business model and find out how everything is organized. Check out the PDF file below to explore Uber's Business Model Canvas.
Technologies For Uber Development
Having experience creating apps like Uber, we’ve listed an approximate list of technologies that should be used for building Uber-like solutions.
- Kotlin for Android app
- Swift for iOS app
- Amazon EC2
- Amazon S3
- PayPal / Stripe
- Elastic email
- Google Maps
- Google Places
- Google Directions
- Facebook SDK
This is just a rough list of technologies that can be used to start your own Uber. The specialists will take into account your business goals, required functionality, covered platforms, etc., to detail it.
What It Will Cost You To Start Your Own Uber Business
Starting an Uber business can cost you approximately $60,000 - $150,000+. Unfortunately, no company can give you an exact estimate until they have information about the business category you want to use for the Uber X model and your business needs. Here are some of the factors that can affect the cost of creating an Uber-lite solution:
Custom vs. out-of-the-box solution
Buying an off-the-shelf solution will cost you less than custom development from scratch. However, you achieve the best results only by creating a product that will consider all your requirements and needs.
Number and complexity of features
The development cost will also change depending on how feature-rich and complex your application will be. More complex features require more development time, which will increase the price.
Cooperation with local IT companies vs. outsourcing
Another factor that affects the price is the cost of development services. As a rule, it is more expensive to maintain the in-house development team or work with local software companies than to outsource to local vendors. In addition, outsourcing offers advantages such as:
- A vast talent pool. Outsourcing allows you to go beyond local specialists and gives you access to the expertise of professionals worldwide.
- Diversity in technology. By choosing local providers, you may not find experts in the areas you need. By contrast, outsourcing provides a wide variety of technologies.
- Flexible cooperation. By outsourcing, you can scale your team as needed and choose one of the many collaboration models, such as staff augmentation or a dedicated team.
- Cost optimization. If you outsource, you can choose the region which offers the lowest cost due to the high government support of the IT sector and lower taxes, e.g., Central and Northern Europe.
- Reduced time-to-market. By turning to outsource vendors, you can also save time finding and hiring staff, allowing you to complete research and development faster.
In addition to development costs, you’ll also need to consider the following expenses:
- Licensing ($700 - $900)
- Insurance ($200 - $400)
- Gas and other incidents ($600 - $800)
- Vehicles ($10,000 - $20,000)
- Additional equipment ($600 - $800)
- Calibration and installation ($400 - $600)
Feel free to request a 30-minute call with our experts to know the development price of your Uber-like service. Our team will study your requirements, agree on the functionality and prepare a rough and detailed estimate for you.
Why Start Your Own Uber Business With Cleveroad
The Cleveroad team has previous experience in assisting with building a solution like Uber and we want to represent one of our cases with you. We helped our US client create a Transportation app that connects drivers with riders throughout the area and helps transport those who are disabled or have other medical needs. The customer approached us with the following business challenges:
- Creating an app based on the Uber business model
- Implementation of a complex filter system
- Offline driver validation
- Integration of payment gateways and implementation of functionality for free-ride option
The Cleveroad team has created a ready-to-use scalable solution that meets the chosen business model and includes the following features:
- Event-driven tracking and communication system
- Sophisticated filtering system
- Dealing with financial operations
As a result, our client received a platform that considers all the needs of end-users. The quality of development allowed our customer to attract the target audience and increase the revenue within the given business model.
Cleveroad is an experienced custom software development vendor skilled in building any-size solutions for various business domains. We have more than 10 years of domain expertise and helped hundreds of businesses acquire new technologies that boost internal pipelines and overall business performance.
We offer several cooperaion models:
Time and Material
This approach allows you to calculate an approximate list of works and start working on the product based on the idea and basic requirements. Each piece of software is developed over two-week sprints, after which the team reports on the work done. If the requirements change, experts estimate how long it will take to include in the final cost. The time and material model has advantages such as high flexibility, collaboration transparency, and cost-effectiveness.
A dedicated team allows you to expand your capabilities by hiring a team of experienced IT professionals. We assemble specialists depending on your needs, e.g., developers, QA engineers, the Solution Architect, and Project Manager. These experts will become part of your team while you work on your product. By choosing this collaboration model, you can increase your team's efficiency, gain complete control over development, and quickly scale as needed.
This model is an excellent option if your in-house team needs more expertise in a specific area. With the help of outsourcing specialists, you can expand your company's capacity for successful software development. Experts will become a part of your team while working on the product. Staff augmentation will allow you complete control over the development process and provide cost-effectiveness and reduced time-to-market.
This model is the best choice for products with well-defined requirements and strict deadlines. The contract is signed after the Discovery Phase when all specifications are detailed. A fixed workscope gives advantages such as full transparency of cost and deadlines and cost-effectiveness. In addition, you always have the option to make changes if necessary.
If you are unsure how to start an uber business, contact us. The Cleveroad team has experience creating Uber-like solutions and will gladly help you.
Ready to build your Uber?
Our team with 10+ years of experience is ready to help you in starting an Uber business
Uber for X models works for a bunch of business categories. The most successful ones are:
- Food delivery (Uber Eats, Glovo, DoorDash)
- Household chores (Hello Alfred, TaskRabbit, Rover)
- Medical consulting (Pager, IsDocin)
- Transportation and logistics (Uber, Lyft, Bolt)
A short list of the main steps for Uber startuppers:
- Start with market research.
- Choose the niche.
- Select the business&revenue model.
- Take care of legal matters.
- Add MVP features.
- Create a promotional plan.
Uber is a two-sided marketplace. Users (riders) generate the demand, service providers (drivers) supply it, and Uber acts as the facilitator providing a convenient and easy-to-use platform for both.
In Uber for X, 'X' means any deliverable service in the market.
Here's how it works: customers connect with service providers by placing their orders in an app. Provers then look through requests, accept them, and – if everything's OK – deliver the service.
Users generate the demand, drivers supply it, and Uber acts as a mediator bringing them together.
Besides, Uber doesn't hire drivers, it partners with them: the more drivers and riders Uber has, the better pickup times and the lower prices they can offer.
For now, the revenue model of Uber implies getting money by charging a ride pay from customers and a flat fee from drivers. Besides, Uber charges for ride cancellations and takes part in promotional partnerships.
Evgeniy Altynpara is a CTO and member of the Forbes Councils’ community of tech professionals. He is an expert in software development and technological entrepreneurship and has 10+years of experience in digital transformation consulting in Healthcare, FinTech, Supply Chain and Logistics
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Great, I want to start a business like UBER, either food delivery or transportation, but I need to know which is the more profitable. In addition, how we can compete with UBER or LEFT? I know we need to have a great business plan in place, but do you offer business consultants in this field?
Yes, our business analysts will do research and consult you on this matter
Exactly what I needed.
this was exactly what I was looking for, its has all the procedures and steps to look into if you want to start up an uber business
Hi. I would also like to start my own Uber service because in the area I live there are no Uber service I need help by doing it please help.
I would like to start my own uber business and I need help . The town that I stay didn't have uber facilities
Hey Jacob! We'd be glad to help you, please tell us more about your idea here
My friend and I have just started uzaprice online taxi app and am happy to have learnt a lot here,hope to read more about it
I'm glad the article helped you!