When Uber started their ridesharing business in 2009, they had a huge impact on the transportation industry with their innovative idea. The business model of Lyft, along with Uber's, continues to captivate aspiring entrepreneurs around the world.
However, starting a new business involves more than just understanding its workings, and that's where we come in to assist you.
In this blog, we'll guide you through the things you need to know and the steps you need to take to start a ridesharing business.
Additionally, we have a few recommendations that can help you grow your ridesharing business further. Keep reading to learn about them.
What Is Ridesharing?
Ridesharing, also known as ride-hailing, is simply a means of transportation, much like hiring a cab. The main difference is that instead of hiring a driver by call or on the street, ridesharing is only possible through a technological platform.
The workings of ridesharing apps are such that they allow people to hire a driver to offer them a ride when they need it, and the driver picks them up and drops them off at their destination. They pay the driver for the ride.
The ridesharing industry statistics and market scenario show us that this model has gained popularity among people for its ease of use. Also, its growth potential offers many opportunities for people who wish to enter this industry.
Things To Know Before Starting Your Ridesharing Business
Before we see the steps, there is one important thing that you need to consider to set up a firm foundation for your business.
You need to decide on a ridesharing niche for your business!
Importance of Choosing a Ridesharing Business Niche
Ridesharing is a popular option for entrepreneurs, but with big players like Uber and Lyft dominating the industry, it's hard to stand out in the market.
Big companies have vast marketing budgets, while smaller businesses struggle to compete. Plus, their features are usually well-rounded, which makes it hard for start-ups to differentiate themselves.
Then again, even these big companies can't target all the customer segments, which leaves certain gaps in the market.
You can target these underserved segments and make them the niche for your ridesharing business.
For instance, if people aren't satisfied with other ridesharing options, fixing those issues could make them choose your service. This shows you're proactive and might make them stick with you.
In short, finding a special way to serve a particular group can help your ridesharing business do well in a tough market.
How To Identify The Niche That Suites You
The first step in finding your niche in the ridesharing industry is to understand the different options available. If you're not sure what makes your business unique, take a look at what other people have done.
Often, inspiration comes from seeing what's happening around you. By learning from others' experiences, you can discover new opportunities or recognise the ones in front of you.
So, to help you, shall we explore some niches in the ridesharing industry?
1. Student Ridesharing Within Campus: Wags Wheels
The story of Wags Wheels began when Dillon Wagner, its founder, saw that there was a lot of demand for rides among students that couldn't be satisfied by Uber or Lyft.
Wags Wheels started as an experiment with a ridesharing service for students at Rowan University in New Jersey.
It aimed to help students get around, whether for a night out or to reach classes on the other side of the campus, especially when Uber was pricey or not available.
The service was well-received by the students, and now they've grown to offer luxury rides and airport cruise transportation.
2. Pet-Friendly Ridesharing Services: SpotOn
Another company that saw an opening in the ridesharing industry and took advantage of it is SpotOn.
In cities where there's an abundance of pets and people need transportation for them, finding a pet-friendly ridesharing service can be a real task.
Many pet owners struggled to find ridesharing services that allowed pets to commute with them. That's when Aparna Srinivasan came up with the idea for SpotOn.
SpotOn lets pet owners, no matter what kind of pet they have, call a ride to anywhere they need to go in New York.
Right now, SpotOn has over 10,000 drivers and provides safe rides for pets all over NYC. They're also planning to expand to other big cities in the US.
3. Kids-Focused Ridesharing: Kango, HopSkipDrive, GoKid, and more
Ridesharing companies like Uber and Lyft are popular because they're convenient and affordable. But has it always been okay for kids to ride alone?
Normally, kids can ride with their guardians on Uber, but it's against the law for them to ride alone without an adult. But parents can't always be with their kids all the time.
That's where some companies like Kango and GoKid saw an opportunity. Now, there are many ridesharing services just for kids.
These companies make sure their drivers are safe and do background checks. They want kids to have a comfy and safe ride, even if there's no adult with them.
These are just a few ridesharing companies that did well by focusing on a specific group that the big services didn't cover. And there are still so many that you can focus your services on.
Maybe you could offer comfy rides for disabled people or seniors. Or you could make a cheap carpool service for people who travel every day in the same direction. There are lots of opportunities out there; you just need to be creative to make the most of them.
How To Assess A Rideshare Niche You Decide on?
Once you decide on your niche, the next thing you need to do is see if it has the potential to do well.
You can do this by following a 3-step procedure:
- Checking for local demand
- Assessing your own interest and expertise
- Seeking feedback from the target populace
Checking For Local Demand
To check the local demand for your service, you must conduct market research and see if there is a real need for it. Does your service solve a problem that your target audience face often? If so, are there services similar to yours, and are they performing well?
Evaluating the need for your service right away will help save trouble in the long run. You also get a better understanding of the niche’s audience, which will help you make some important decisions as you start the ridesharing business.
Assessing Your Own Interest and Expertise
Running a successful business can take a lot of dedication, just as much as it takes time and investment. No one wants to spend a portion of their life doing something they do not like or care about in the least.
So, if you want your ridesharing business to succeed, make sure that you like how you run the business. Focus your niche on something you like—something you know very well about.
Seeking Feedback from the Target Populace
Of course, the best way to know if your business will succeed is to ask the people it's meant for. Contact your target audience and ask them what they think about your business idea.
You can conduct a survey to get their opinions. Ask if they need your services if they'd use them, and how often they'll need them.
Doing these things can help you determine whether the niche you choose is the right one for your ridesharing business.
The Steps To Start Your Ridesharing Business
Now that we’ve seen how you can decide on a niche, it is time to find out how you can start your business.
Here are the 7 steps of starting your ridesharing business:
- Market Research
- Business Plan Preparation
- Securing Financing
- Legal Requirements
- Monetisation Strategies
- Creating a Ridesharing App
- Marketing
Market Research
We've discussed how market research and communication with your target audience can help you find your niche. But market research is important for more than just that.
It helps you see how much demand there is for your service, so you can determine the scope of your business and how much you should invest in it.
Also, when you study your competitors, you can see what they're doing well and what they're not. This helps you make better decisions as you move forward.
Business Plan Preparation
A business plan is like a manual for your business. It should have everything you need to start and run your new venture. Having a well-written business plan can keep you on track as you take the necessary steps to start and run your ridesharing business.
First, it should include all the important information you found during your research. This helps you understand your business potential and what you need to do to make the most of it.
Here, you should also list out everything required to start your business, like licenses and permits. And you can outline your financial plans, like how much investment you'll need and where it will come from.
Your business plan should also detail your strategies for promoting your business and attracting customers.
Secure Financing
When it comes to startups, it's smart to start small and expand gradually. So, when planning your finances for starting the business, focus on three main things:
- Ridesharing Business Permits
- Ridesharing Business App
- Marketing
You have several options for getting the money you need. First, you can use your savings or apply for business loans.
Another option is to pitch your business idea to investors. Explain your business and why it has potential. If investors see value in your ideas and strategies, they may be willing to fund your business.
Lastly, you can also consider crowdfunding. If your business idea has received positive feedback from your target audience, you can launch a campaign to raise funds.
Legal Requirements
Every business, including online ones like ridesharing, needs to follow local rules.
Before you start your ridesharing business, make sure you know the laws and rules in your area. For example, in the USA, you'll need to comply with regulations set by the Public Utilities Commission (PUC) and trademark your business name. Additionally, licensing requirements vary from state to state.
In New York, you may need a TLC (Transportation and Limo Committee) license, while in New Jersey, a TNC (Transportation Network Company) license may be required. Each license has different insurance and cost requirements.
Navigating these regulations can be confusing, so you can learn from your competitors or seek help from industry experts to understand and obtain the necessary licenses and insurance for your ridesharing business.
Monetisation Strategies
If you're starting an online ride-sharing service, you'll want to know how to make money from it.
Most ride-sharing companies, such as Uber, earn revenue by taking a percentage of each ride booked on their platform. This is known as the commission-based model. Your platform acts as a middleman between customers and drivers, allowing you to earn a fee from both parties.
However, commission fees aren't the only source of revenue for companies like Uber. They also generate income through in-app advertising. Brands pay to advertise their products and services within the Uber app so they can capitalise on its large user base.
Maybe you can explore other revenue streams, such as offering monthly or yearly subscriptions. Customers may pay for premium perks like ride discounts and exclusive events.
There are many ways to generate revenue beyond just commissions. So, if you think about it, you can find additional opportunities to monetize your ride-sharing business.
Launching Your Ridesharing Business App
In ridesharing businesses, the app is the heart of the operation. It's how customers connect with the drivers and book their rides.
The quality and convenience of your apps here are as important to your business as picking the right niche and using smart marketing strategies.
If the app is difficult to use, customers may become frustrated and less inclined to use the service. So focus on creating a ridesharing business app that is easy to use.
There are two main ways to create a rideshare app: custom development and ready-made solutions.
Custom Development
Custom development involves starting from scratch and building the app from the ground up. The process here involves:
- Wireframing - Creating a basic visual guide to show the structure and layout of the platform
- Designing - Adding visual elements like colours and images to the wireframe to create an appealing interface.
- Developing - Coding and building the functional aspects of the platform based on the design.
- Testing - Checking the platform for bugs and other issues to ensure it works properly.
With custom development, you'll work closely with a development firm from the beginning, start listing the requirements from scratch, and slowly bring your vision for your platform to life.
This way, you can ensure the app meets all your requirements and expectations. For all the time and resources you invest in it, you'll get an app that's tailored exactly to your needs.
Readymade Solution
On the other hand, choosing a ready-made solution means you launch your app by purchasing a pre-developed one from a provider and then rebranding it to represent your business.
To help you understand, ready-made solutions are pre-built apps and websites designed for specific businesses.
Unlike custom development, where you start from scratch and work on the design, features, and functionalities, ready-made solutions already come with all the necessary features. This makes them cost-effective and quicker to launch.
You simply purchase these ready-made solutions, rebrand them, and use them as your own business platform.
In the ridesharing industry, a ready-made solution is often called an Uber clone.
These can also be customized, so you can easily tailor your app’s look and feel to match a specific niche.
Take a look at our Uber clone, known as Wooberly.
- This is a pre-built ridesharing solution that has a sleek user interface.
- It comes with Android and iOS apps for both riders and drivers.
- It also includes an admin panel for effective management of the platform.
- It is a 100% white-label solution, and it can be customised to suit any niche.
We also provide 100% source code so you can add unique features to the platform.
Now, both custom development and ready-made solutions come with different requirements and offer you different pros and cons. You can look into both these ways and see which one is the best option for your business.
Also, if you wanna know more about our Uber clone and how it can help you focus your business on your target audience, reach out to us!
Contact us through WhatsApp and we will answer the questions you have for us.
Now, moving to the next section.
Marketing Your Ridesharing Business
In the present era, there are many modern digital marketing strategies for startups, such as content, paid media advertising, and social media marketing.
With effort and a little strategy, you can use these channels to the advantage of your ridesharing business.
Have a user-centered approach to marketing and make it as easy as possible for people to find your ridesharing business. For that, you can:
1. Develop a User-Friendly Website
Earlier, we saw the role the app plays in your ridesharing. business, but the role of technology extends beyond just the app in your ridesharing business, as a website for your business can boost your online visibility and make it simpler for potential customers to find your ridesharing service.
It can also act as a central place where customers can find essential information about your services, pricing, and how to book a ride, which helps them see why your service is desirable over others.
2. Optimise Your App for the Play Store and App Store
When your business relies a lot on your app, you have to make sure that it's getting noticed. And for a business like ridesharing, it's crucial to do what you can to make your app stand out in the app stores.
The more people stumble across your app on the Google Play Store or the iOS App Store, the better it is for your business.
You can improve the visibility of your app on app stores by
optimising your apps for the app stores. This can involve things like,
- Choosing the right name
- Adding captivating screenshots
- Having good reviews and ratings
- Updating the app regularly
When you practice app store optimisation, you make your app more appealing to your target audience which can drive more downloads.
3. Practice Content Marketing
Content marketing can be a great way to showcase your expertise to your target audience.
For example, if you run a ridesharing service for kids, you could write articles or make videos about common concerns and questions parents may have about ensuring their child's comfort and safety during rides and such.
Sharing informative and relevant content like this can make you a trusted expert in the industry, and you can also attract new customers who need your help to understand things in your industry.
4. Use Social Media to Engage
Using social media to connect with your audience is important for your marketing. It's a place where you can talk to your customers, share news and special offers, and get people involved.
By joining in conversations, answering messages, and posting interesting stuff, you can build a strong relationship with your audience and make them loyal to your brand.
Things You Can Do To Add Value To Your Ridesharing Business
After you start your ridesharing business, there are ways to enhance your services to attract more customers and drivers.
By improving your offerings, you can encourage existing users to recommend your business to others, leading to organic growth and customer retention.
Here are a few things you can do to enhance your service:
✅ Personalisation is one of the most effective marketing tactics. When you know a lot about your niche, you can easily come up with a way to make the ride personal for those who opt for your service.
✅ Reward programmes for both riders and drivers can boost loyalty and engagement in your ridesharing business. By offering perks like discounts, you motivate riders to choose your service and drivers to provide top-notch service.
✅ Dynamic pricing or surge pricing is a smart strategy used by ridesharing businesses to adjust fares based on demand and other factors. This means prices might go up during busy times and down during quieter periods. This helps your drivers earn more when lots of people need rides.
Conclusion
And with that, we have reached the end of the blog. Hopefully, you found this helpful as you begin your journey in the ridesharing industry.
As we close the blog, we would like to remind you of the key information we just came across.
Your niche can be your key to standing out in the ridesharing industry. Your app is the heart of your service, so make it as appealing as it can be.
And finally, your service grows through happy riders and drivers, so do what you can to make them feel satisfied with your service. Good luck with your business!
Launch your Ridesharing App with Us!