How to start a profitable rideshare business under 5000$?

How to start a profitable rideshare business under 5000$?

Let’s know one of the hottest business ideas in the market: Ridesharing. We get inspired by Uber and Lyft, but how about you start one on your own? Check out this blog to know how to start a ridesharing business in 2022!

Saaradha Senthil Kumar
Saaradha Senthil Kumar

Entrepreneurs across the world are excited about the business model of Uber, Lyft, and many other leading ridesharing businesses.

Well, it takes a little more to be a one-of-a-kind entrepreneur. That's why we've come up with these eight actionable recommendations to help you get your ball into the ring with ease.

To learn more about how to start a ridesharing business, keep reading.

What is rideshare?

The terms "carpool" and "bike pool" are often used to describe ridesharing. In general, pooling refers to bringing together two or more people to enjoy or experience a certain benefit.

The ridesharing concept was created to help consumers save money while traveling to the same or nearby areas. People “pool” together in the same vehicle to get to the destination and pay their fair share.

What is a rideshare company?

A ridesharing company is an online business that runs via a website or an app that connects people who travel to the same or connecting locations and pay the driver the agreed-upon sum for their transportation.

The rideshare company manages the riders (customers) and the drivers. The business profits from the ride commission and distributes the driver's revenue after a set period.

8 Actionable steps to start a rideshare business in 2022

🔍 Find your rideshare business niche

Finding the business niche is the foremost step to becoming an entrepreneur. You can pick your niche when you ask these two questions to yourself.

  • What's your interest and passion?
  • What is the common problem faced by people in the industry?
  • What is the solution to the said problem?

If you got answers to these questions and then apparently you have found your niche.

📈 Do market and competitive research

Market research helps you understand the magnitude of the situation that your product or service can sort out.

Conducting market research will help you understand the ridesharing market and what the competitors are doing about it.

You have to conduct the primary research and back your primary research findings with the secondary research.

Here's how you can conduct market research for your ridesharing business:

  • Identify your audience persona.
  • Determine the type of research you're going to conduct.
  • Create a series of questions for your research.
  • Talk to your target audience about their needs.
  • Comprise and analyze the data.

💡 Validate your business idea

Market validation determines the need for your product/services within your target market.

It helps you understand the market needs and whether people will use your rideshare services.

Conducting the market validation in the early stage will help you focus on the ideas that matter for your target market.

Here's a guide that explains how you can validate a business idea.

⚖️ Check the online business laws & regulations

Any business will have local laws and regulations to put it in force.

The laws and regulations for online business come with a particular jurisdiction. Therefore make sure you read the room (know the market) before you jumpstart your ridesharing business.

You’ll get to know the local laws if you study your competitors not only from an operational angle but also from a business setting up angle.

🏭 Register your business & get all the permits

Check out all the local permits that you’ll have to get to become a legalized profit-oriented business.

For instance, in the USA you’ll have to regulate your ridesharing business with the Public Utilities Commission (PUC), you have to trademark your business (brand or product name).

For further instructions on business registration and proceeding. Refer here!

💰Determine how to monetize your business

If you're starting an online ridesharing service, you'll need to know how to make money out of it.

Many ridesharing companies like Uber makes money by getting commissions on every transaction that happens on the platform.

This revenue model is known as the commission-based model.

Your rideshare platform acts as a mediator between the customers and the drivers.

You earn by getting the service fee/commission from both customers and the drivers.

Also, you can earn by offering monthly and yearly subscriptions. Customers would pay a monthly/yearly subscription fee to get exclusive perks such as discounts on rides, community-exclusive events, etc.

📱 Create a rideshare app

There are two methods for creating a rideshare app.

One way is to build it from the ground up, while the other is to purchase a Uber clone that can be instantly white-labeled (rebranded) to meet your business's requirements.

Native technology is used when it comes to developing from scratch. It is more time-consuming and burns a hole into your pocket.

Using a cross-platform technology like Flutter, on the other hand, offers significant benefits, including a 3X reduction in development and testing time and a 5X cost-cutting strategy.

🗨️
Flutter is an open-source framework by Google that lets developers create natively compiled applications for mobile, web, desktop, and embedded apps from a single codebase.

Here're some of the advantages of using Flutter,

  • Single code base for multiple platforms.
  • Less development time and money.
  • Productive app development with a hot reloading feature.
  • Similar to native app performance.
  • Faster time to market.
  • An engaged community to help you at every part of development.

Incorporate exciting features and functionalities into your ridesharing business and make it more user-friendly.

Make your ridesharing app more user-friendly for customers by incorporating exciting features and functionalities.

Here're some of the features that you can include,

For riders' app:

  1. Easy signup
  2. Multiple vehicle options
  3. Scheduling a ride
  4. In-app wallet
  5. Fare estimation
  6. Multiple stops in a ride
  7. Multi-language

For drivers' app:

  1. Simple registration
  2. Google map integration
  3. Earnings management
  4. Dynamic routing
  5. Availability status
  6. Payout account addition and management

These are some primary features that you can incorporate into your rideshare app.

📣 Develop a marketing strategy

As a millennial entrepreneur, you may get an advantage by utilizing modern digital marketing tactics such as content, paid media advertising, and social media marketing.

  • Develop a user-friendly and informative website for the people to find you.
  • Use Google My Business to localize your marketing and brand awareness.
  • Use content marketing to inform your customers about your presence in the industry.
  • Use social media to engage with your target audience.
  • Use copies on your website and paid ads to make it more appealing and exciting for your audience.

If possible, allocate a budget for traditional marketing.

What value can you add to your ridesharing business?

✅ Giving out multiple payment options helps customers to pay without any difficulty. One such fast-growing payment option is digital payment options like in-app wallets, UPIs, etc.

✅ Handing out a precaution notification (for helmets, seat belts, masks, hand sanitizers, etc.) in your app or website will get you a step up as a business owner since it’ll mean you care beyond profits.

✅ Conducting a background check on the drivers will give confidence to your customers. In this pandemic era, you can even mention whether your drivers are vaccinated or not. Authenticate it with a vaccination certificate - that’ll help.

✅ Personalization is one of the most appreciated and encouraged business tactics when it comes to marketing. Take Zomato as an inspiration for you to work on personalized content for your customer.

✅ Incentivize the ride miles for drivers, give out rewards or bonus points for ride invites, etc. to make them feel that they are a part of this platform just like your customers.

5 Best ridesharing apps to get inspiration for your business

1. Uber

No introduction is needed!

We all know what Uber is and its popularity among the ridesharing businesses around the world.

Uber's pricing system is competitive and it provides one of the best services for its customers.

Do you remember the term 'Subscription-based business model' we discussed earlier?

Uber offers Uber one, which is a subscription service that allows Uber's customers to get unique perks like ride discounts, unlimited ZERO delivery fees, etc.

Inspiring, right?

2. Lyft

Lyft is the 2nd largest ride-hailing app after Uber.

They began as a long-distance ride-sharing app for college students. After that, they concentrated on providing short-distance transportation within the city.

Today their services include bike-sharing, scooter sharing, and self-driving mobiles to numerous customers from various locations.

3. Ola cabs

Since 2010, Ola has been one of India's most popular ridesharing apps.

They recognized their popularity and expanded their services to Australia, New Zealand, and the United Kingdom.

They have segregated their services pretty well - within city, outstation, and rentals.

It's divided again by the type of vehicle you'll be riding in - micro, mini, prime sedan, prime play, prime SUV, and so on.

These services are tailored to the customer's social and financial situation.

4. Grab

Grab is the leading ridesharing company in Southeast Asia, with operations in Singapore, Malaysia, Cambodia, Indonesia, Myanmar, the Philippines, Thailand, Vietnam, and Japan.

How did they succeed in the South Asian market despite the presence of major companies such as Uber and Lyft?

When they first started, they only charged 20 cents every ride, which was significantly less than their competition.

5. Bolt

Bolt started their operations in Estonia and Tallinn.

Their USP was to make taxis available to their target audience during peak hours and weekends. This made their business grow rapidly and the word of mouth about the app started to spread.

We know that E-vehicles are increasing more in the upcoming years. But Bolt launched its first dockless electric scooter in Paris and subsequently in other cities as well in 2018.

That’s extremely futuristic, right?

Conclusion

All these pointers will help you get started with your online ridesharing business, but importantly, you’ll need a tech solution, to begin with.

That’s where we come in!

If you plan on creating a ridesharing app, we would love to introduce you to Wooberly, a ready-made on-demand taxi app solution, that can be customized into any on-demand app you want.

Our customers say that we are worth it!

You gotta schedule a FREE demo before closing up this blog.

If you got any queries after the demo session, feel free to contact our support team.

Take your pick, WhatsApp or email us at [email protected]

Create your rideshare app with us!

Create your rideshare app with us!

Starting a business

Saaradha Senthil Kumar

Saaradha is a former content writer at RadicalStart. She helped aspiring entrepreneurs digitize their business through thoroughly constructed blogs on booming business ideas and technology.