How To Start A Rideshare Company From Scratch And Get Your Profit

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13 Nov 2018
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12 min
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Sergey L.
Copywriter

It is summertime and it means that need for travel starts burning in your soul. You can go to sea or hiking tour or simply go outside the city to relax in a calm and silent atmosphere. But wherever you plan to go, you need to take transport to go there. If you have a car, this problem can be resolved quickly, but if you don't? In this case, you can find a car that is going the same way. It will help you save time and money.

We can list such carpooling services as BlaBlaCar, Lyft, and others developed especially for searching fellow travelers. They are very popular among the young people. What is the secret of their popularity? We will consider this issue in our article. And if you want to find out how to start a ridesharing company and make a special mobile software, we will explain you everything.

What is carpool and how does it work?

Ridesharing or carpooling is the type of a ride when a driver picks up passengers that go the same way he goes, and they reimburse fuel costs. The trip can be referred to rideshare services only if it meets the following conditions:

  • car owner doesn't provide passengers with on-demand services. It means that he or she will go to the required destination in any case, regardless of whether he has fellow companions or not;
  • car owner just saves on fuels costs but he or she doesn't earn money on it;
  • since this service implies that passengers share a ride, they must participate in the sharing of a total ride cost. In most cases, the cost of fuel is shared between all companions. But also a driver can look for companions not for financial sharing, but for people who have a driving license. When there are 2 or more drivers in the car, it is possible to have a bit rest during the trip. Moreover, a good companion is good for chatting during the long road not to fall asleep.
Enterprise rideshare

Carpool app example - how it looks

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So what is rideshare? The main idea is to save on fuel cost and organize a group of people to go with. Owing to the Internet and GPS technologies, it is not difficult to find companions. However, you shouldn't forget about precautionary measures and nuances of this service.

Now then, a short summary of the service goal:

  • a driver fills in the form in a rideshare app and places the information about his or her destination point;
  • passengers find this route on a Web, get in touch with a driver and discuss details;
  • passengers have the same traveling route;
  • driver saves on fuel cost, and passenger feels more comfortable than in bus or train.

Steps on how to start a rideshare business

If you want to know how to create a rideshare app, follow these steps below: 

  • Step 1. Find out pros and cons of a ridesharing app development
  • Step 2. Define your niche to build a right rideshare app
  • Step 3. Conduct a marketing analysis to make a rideshare app
  • Step 4. Choose the business model for your app
  • Step 5. Find the appropriate monetization way
  • Step 6. Mind to settle required legal issues
  • Step 7. Add MVP to your rideshare app

Advantages and disadvantages of carpooling

Nothing has only positive sides. Carpooling service is not an exception to the rule. So let's consider weak and strong sides of ridesharing services before you start your own rideshare business. 

Advantages of carpooling:

  • The main advantage of rideshare solutions is cost saving, of course. Depending on the agreement, a ride can be twice as cheap than traveling by conventional way;
  • Don't forget that your car it is not a gas cost only. There are some cost items for the maintenance, repair, parts replacement in your vehicle. If you reduce the time of car utilization, you reduce these costs; 
  • A fewer number of cars on the road can reduce the CO2 emission in the roads and make the air we breathe cleaner;
  • Saving time. Fewer cars - fewer traffic jams. That is to say, it is possible to reach a destination point faster and find a parking place. 
  • Meeting new people. Traveling together allows you to find good friends. 

Do you how much will it take to build an app like Uber? Watch our video below to find out it: 

Uber app development - how much does it cost?

Disadvantages of carpooling:

  • Indecent passengers. Some people can try to discount the price or even ask the driver to visit the place that is not on the scheduled route. And it is important to screen out such individuals at the very beginning of traveling.
  • Indecent drivers. Unfortunately, some drivers can play an unfair game as well. For example, drivers that take 5-6 people in a small car and ask for a high price. 
  • In some cases, a driver has to pick up each companion separately. It increases the time of traveling. 
  • Passengers can be not satisfied with the driving style of a car owner. In turn, the driver can be annoyed with an excessive volubility of companions, their untidiness or lack of manners.  
App carpooling

Strong and weak sides of ridesharing

A weighted strategy to the best rideshare app development

There may come a day when you find yourself thinking that you want to find out how to make a rideshare app. But what to start with? This question is predictable and obvious. First of all, you should follow a few key issues to make your app competitive and successful. And the wise implementation of your idea will help you make a real profit in the future. Don't forget that you need to hire a company that will provide you with high-quality app development services.

Define your niche

Ridesharing services are not old since they exist for only a few years. But services like Uber or BlaBlaCar have already occupied its niche and they are very popular around the world. But how many similar platforms have been trying to gain the leading position and failed? I think there are many of them. So first you need to choose your niche. Why is it necessary? Simply because you should create a new strategy to attracts potential clients. There is no sense to repeat the experience of Uber and other successful rideshare companies since it will not draw users' attention.

Classic trips

For example, your ridesharing app can be aimed at classic long trips. It can be a trip both to another city and even to another country. Thus, it will be more comfortable for new users to deploy your service since it is targeted only for one type of a ride.

Rideshare app long distance

Classic trips for long distances

Taxi type

As usual, taxi is a type of a transport service for moving around the city. Thus, you can develop a service that will act as a taxi but with one difference - a driver won't take people on demand. Moreover, working as a driver is not the main job of individuals engaged in this business. Such service can be beneficial for people who are going to move from one city's district to another. They offer to join them if somebody needs to get to the same place. Driver saves on fuel cost, passenger saves on time. Bingo! Obvious benefits of carpooling.

Carpool app iPhone

The ride that takes you around the town

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Regular trips

This kind of service will be beneficial for people who often go the same place every day - to the office, for instance. They use a fixed-run taxi or bus to get there but it is possible to offer them a new type of a ridesharing service. The driver who goes to work every day can pick up passengers living in their district that a similar route. It makes it possible to perform regular trips every day with the same driver. And your ridesharing app can turn this idea into reality.

Your marketing strategy

After you determined what type of app for carpooling you need when you create your own rideshare app, you should choose your marketing strategy. Without a competent strategy, you will not be able to succeed in your business even if your idea may seem really worthwhile.

Analytical approach to market research. You should understand the market and inspect already available ridesharing services. You need to emphasize key factors that competitive service has and ponder on developing something different and unique. Don't forget to study their technological methods since you cannot ignore it - understanding of what technologies they use can help you start a rideshare company with advanced features. 

Choose the business model. If you are far from these marketing things and they seem something complicated for you, never mind. Pay your attention to Business Model Canvas. It will help you spell everything out since it displays all key points you must follow during the new business development. There are nine of them:

  • key partners;
  • key activities; 
  • value proposition; 
  • customer relationship; 
  • customer segment; 
  • key resource; 
  • distribution channel; 
  • cost structure; 
  • revenue stream  

If you find a right solution in your specific case for each item above, you will be able to move forward to your success and design a ridesharing application of a high quality. 

App monetization. When you invest in the app development, it is absolutely naturally that you want to earn money on it. There are a few types of monetization that are standard but not less beneficial.

  • Free app with advertising. This app will be free to download but it will be full of advertising. And if users are bored with the app, they can buy a premium version without any ad. As to app owners, they will get money for all advertisements;
  • Freemium. Users will get main basic features for free and without advertisement. But there can be additional features that will give users more freedom and comfort. Such app version is paid;
  • In-app purchases. This option can be not very suitable for a ridesharing app since there are no so many things you can buy in app. But it can hold a top position in a drivers' list if the user always wants to be one of the first drivers to go with, he can pay for it. 

Marketing strategy to the knowledge of how to start your own rideshare business requires a hard work and creative thinking. But remember, no pains - no gains.

Settlement of legal issues

We speak only about legal ways of running business. And together with the development of the ridesharing app itself and deployment of right strategy you should abide the law. You must find out how to register your new app in order not to violate the laws of your country. Honest business is the best choice.

How to make a rideshare app

We reached the point of the app development. You can develop a carpooling service on your own or find a good development company. For the beginning, you should determine on MVP features for starting a rideshare business.  However, you may use also our mobile app cost calculator to have an idea of your future app cost.

Approximate cost of MVP features development
Feature Min time (h) Max time (h) Approximate cost ($)
Status changing 18 28 900/1400
User profile 41 59 2050/2950
Search 10 16 500/800
Payment 22 34 1100/1700
Identity verification 2 4 100/200
Panic button 7 11 350/550
Chat 68 100 3400/5000
Admin panel 6 300
History 22 30 1100/1500
Ranking 13 19 650/950
Social sign-in 6 11 300/550
Groups creation 47 78 2350/3900
Total cost 13,100/19,800

MVP features

Status creation, tracking and changing

First and the main feature that allows users to create information about the new root or change its destination etc. Also, users can track the status of a specific ride and get a push notification in case of any changes.

Tracking of specific drivers and passengers

For example, you had a ride with this driver before and you were satisfied with it. Now you want to track all rides of this driver to go with him again if he goes the same route you need. In addition, you should know the necessary information about your companions. So this feature should be used for carpooling app development for sure. 

Carpool app for Android

Tracking of trips you planned

Search

Everything is clear here. To find the required route or a driver, you need to use search for it.

Payment

Of course, cashless payment should also be available, that is why payment integration is a must. You can provide users with a choice - select a cashless payment or pay a driver by cash when ride is finished.

Identity verification

For registration and login, you can add captcha to screen out bots and fake individuals. Then it would be better to add the necessary feature for individuals verification to avoid criminals or indecent persons.

Panic button

Due to GPS tracking of user's phone, he can push the panic button in case of emergency and call the police that will find him or her using received coordinates from the carpooling platform.

Ride sharing software

Integrated panic button in case of emergency

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Chat system

Driver and passenger can add their phone number for making their communication via the chat messenger more convenient.

Admin panel

Keep in mind to provide yourself with the access as an admin to manage accounts and any other information in the software. Or you will hire an admin that will control this process and help with the resolution of any troubles and bugs.

Suggest rides based on user's history

The special algorithm can offer users rides on the basis of his or her commuting history. It is very convenient if the user often goes to the same place. So you can add it in your new rideshare app.

Ranking system

This feature makes it possible for users to find better and more decent driver since the system ranks drivers by their ratings.

Rideshare statistics

Leaderboard to find the best driver

Groups creation

All users can create groups for people who often travel the same route whether it be intercity travel or daily ride to their job.

Social sign-in and sharing

People can register via existing profiles on Twitter or Facebook and share ride information on their pages to increase the number of people looking for a ride.

As for approximate cost of rideshare app development, it may vary from $13,100 to $19,800, but keep in mind that final price will depend on your specific requirements. Also, you can use our app cost calculator that will help you make rough estimations of your future app.

How to create a rideshare app

How to develop a rideshare service?

And, finally, don't forget about quality design and user experience. Your app should be user-friendly and attractive in order not to disappoint your users. And you'd better create the app from scratch to make it unique and different from others.

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Learn how logistic management software can help you. Read A logistics management application as a troubleshooter in the sphere

So now you see how to make a ridesharing app. Your service may become a real magic wand for many people who cannot imagine their lives without a travel. But you will have to work hard to succeed in it. However, our company can come to rescue and lend a helping hand to develop a mobile ridesharing app at a high-quality level. Contact us, subscribe for our blog and be happy!

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