How to Start a Rideshare Business

Do you have an idea for a rideshare app that will unseat Uber? Or have you been workshopping a ridesharing app concept that will capitalize on one of the many niches that larger rideshare companies have neglected?

Perfect, you're in the right place.

The following article can give you an idea of what goes into launching a successful rideshare business. We'll discuss how to

  • Perform market research
  • Hone in on your target market
  • Decide on your business offerings
  • Develop your rideshare brand
  • Register your business & get the necessary permits
  • Determine your pricing and fare distribution
  • Find a fleet management solution

We will tackle designing your rideshare app and take a deeper dive into legal requirements in future blog posts.

What is ridesharing?

Ridesharing is a service is a company that, via websites and mobile apps, matches passengers with drivers of vehicles for hire. A ridesharing company is an entity like Lyft or Uber that facilitates rides between drivers and passengers. Ridesharing companies and the services they offer take many different shapes and sizes to fill various gaps in the market. We've all heard of the companies above, but have you heard about Kidmoto, the rideshare app that provides families with young children airport car service or school transport in vehicles with pre-installed car seats? Or Spoton.On the rideshare app that helps humans hail rides for their pets?

source: staisa

Rideshare market opportunity

After hitting a speed bump, better known as the global pandemic in 2020, the rideshare market is back on track and expected to exceed $61 billion in revenue inside the US alone in 2022.

Signs the rideshare market is speeding up

  • Revenue for US based ride share businesses is expected to grow by 4.47% each year for the next four years.
  • The global rideshare market is expected to grow by 15% over the next year.
  • 71% of rideshare revenue will be generated through online sales by 2026.

Rideshare market research


Understanding the market you want to enter will help you create a product with a built-in clientele.

Here are some quick tips for getting to know the market you'll be operating in.

  • Identify your target audience (more on that below) and talk to them about their needs. Find out what they want out of a ridesharing service.
  • Identify similar ridesharing services and take rides with them. Pay attention to what you like about them and areas that could be improved.
  • Interview rideshare drivers. Ask them what they like and don't like about the rideshare services they drive for.
  • Check the online business laws & regulations that will affect your business.
  • Keep an eye out for needs that aren’t being met. E.g. limited parking and/or poor public transit to major attractions.
  • Comprise and analyze the data to validate your business idea.

The scenic route

Doing your research now will pay huge dividends down the road.

As you develop your rideshare business, you'll want to immerse yourself in the market. Log miles with each of the rideshare businesses in your area, noting what you like and what you think could be improved. Determine what market they serve (the type of customers they target and the areas they operate in) and what advantages their feature set gives them over their competition. Look at the vehicles they offer and determine how they help them best serve their target market. E.g., is it a budget rideshare option that employs mostly hybrids, or does the company specialize in serving rides in classic cars at a premium?

Speak with rideshare drivers and find out what they like about partnering with their chosen services. Is it the availability of passengers? How much money do they make? Ease of use? Ask them what they want to see from apps in the future and what features would persuade them to drive for another business.

Speak with your connections that use rideshare and ask what they look for in a service. Find out what apps they use, what they use them for (e.g., picking up furniture they bought secondhand or going to and from medical appointments), what they like about them, and what they don't.

Determine your target market


To best serve your customers, you have to know who they are.

Here are some questions you'll want to answer about your customers:

  • How old are they?
  • What kind of jobs do they have?
  • How does your service help them?
  • How comfortable are they with using technology?
  • How sensitive to price are they?
  • What values do they share?
  • What are some of the common places they go? I.e., school, the airport.
  • What is important to them?
  • What rideshare platforms do they use and what do they like/dislike about them?

After combining this information, you should be able to form a service around your target market.


Age: 32

Occupation: Camera operator

Primarily uses rideshare to get from home to the airport. Her job requires that she carries lots of gear when she travels. She prefers to schedule rides well in advance.

Price sensitivity: She expenses the majority of her rides. She cares more about convenience than price.

Current Rideshare app: Grace mostly uses Uber XL because she likes that she can pre schedule a large vehicle. She dislikes how limited Uber’s reward program is.

The scenic route

When creating a business plan, you must outline your target market (a particular group of consumers your product is aimed at). That's not to say that folks outside your target audience won't still be able to use your product (adults can eat all the Trix cereal they want), but by defining your core consumer, you'll be able to build your app around the features that matter to them.

Defining your target market will help you streamline your product offerings and allow you to give your customers the best possible experience. Remember, in a market filled with choices, it is better to be loved by some than liked by many.

A target market can be defined by various factors, such as shared demographic characteristics or traits. The research you completed earlier around gaps in the market is a great place to start when outlining your target consumers.

For more information on how to define your target market and why it matters take a look at this INC article.

Define your business offering

Use your market research to help you choose a niche for your company that will differentiate you from your competitors.

  • For example, you could focus your rideshare service on passengers traveling to sporting events or students who need a dependable person to pick them up after a party.
  • Another way you could differentiate your business is by offering specific types of vehicles. For example, you could offer oversized vans that hold lots of people or four-wheel drive vehicles to shuttle passengers to ski slopes or remote hiking trails.

Developing your ridesharing brand


Your brand is how the world perceives your business.

Use the checklist below to ensure you've thought about each element of your brand.

  • Decide on a name for your business and make sure it isn’t already taken.
  • Determine how your brand speaks and which colors represent your brand.
  • Think about the values your brand holds.
  • Develop a mission statement (a quick summary of your business's ultimate goal and how you aim to achieve it.)
  • Develop a logo.

The scenic route

Much of your brand's personality will be based on the service you provide and the market segment you serve. When writing for your brand or deciding on a logo, think about your target consumer. What would resonate with them? Think about what makes you stand out in the marketplace. For example, does your fleet management software help you provide rides faster than your competitors? Maybe your brand colors should be red and yellow to give your touchpoints a feeling of speed.

One of the most critical pieces of establishing your brand is deciding on a name. Blue Ribbon Sports, Phil Knight's first choice for a business name, doesn't quite have the same ring as "Nike."

In her book, Hello my Name is Awesome, veteran business namer Alexandra Watkins outlines the elements that make a business name resonate with your audience.

According to Watkins, a good business name is

  • Suggestive — evokes something about your brand
  • Meaningful — resonates with your audience
  • Imagery — is visually evocative to aid in memory
  • Legs — lends itself to a theme for extended mileage
  • Emotional — it moves people

In her book, she also dives into what to avoid when naming your business

  • Spelling challenged — looks like a typo, or it's not spelled the way it sounds.
  • Copycat — is similar to competitors' names
  • Restrictive — limits future growth
  • Tame — hearing it leads to indifference
  • Curse of Knowledge — makes sense only to insiders
  • Hard to pronounce

Register your business & get the necessary permits

You'll need to file the correct paperwork to become a legalized profit-oriented business. This can include tax and trademark information.

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

For further instructions on US business registration and proceeding, click here.

Determine your pricing and fare distribution

How you price rides and the percentage of each fare you give to drivers will influence how many customers and driver partners use your app.

Pricing is a three-way balancing act where you need to account for

  1. How you price your rides. This will affect how many customers use your service.
  2. How much you pay your drivers. This will affect how many potential drivers will want to work with you.
  3. The percentage of each fare you keep for your business. You'll use this for operating expenses, marketing, etc.

A few things to keep in mind

  • Big rideshare apps take 20-25% of the fare of each ride, and the driver gets the rest. A good way to attract new drivers to your service is to give them a higher percentage of each fare.
  • Consider flat rate vs. metered pricing.
  • Decide if you would like to include surge pricing.
  • Rates can vary significantly from area to area. Be sure to consider what consumers in each region you plan on doing business in are willing to pay.
  • Lower pricing can help incentivize people to use your service, but lower prices can also signal lower quality to consumers.
  • Survey rideshare drivers and ask how many riders they get on average in your area. Use this data to help you determine how high your rates and percentage need to be to turn a profit and keep riders and drivers happy.
  • Pricing can be adjusted, especially as your service is just starting out. Experiment, when you can, to find a pricing structure that works for your business.

Start your business faster with fleet management software

A fleet management system is a software that helps dispatch managers automate and optimize various processes critical to their rideshare business.

In 2020, nearly 80% of fleet managers used fleet management software daily, and 72% of livery companies used a fleet tracking system. According to a 2021 report, 32% of businesses using fleet apps attained a positive ROI in under a year.

You could eat up time and resources developing your own fleet management software, or you can deploy EverTransit, the only fleet management system that’s available on-demand.

Using an advanced suite of cloud-based fleet software, EverTransit lets you automate everything from booking to billing inside your rideshare service.

With Evertransit, you can

  • Automate dispatching based on proximity
  • Give your clients the fast, seamless mobile experience they need with instant booking from your website or app.
  • Streamline billing and invoicing with tools for credit card processing, invoicing, and account management.
  • Customize dispatching settings, driver permissions, billing preferences, and more.
  • Collect actionable data like driver behavior, popular locations, and new and returning customers.

Take Evertransit for a spin

Get in your fleet’s driver’s seat with technology that saves time, maximizes productivity and facilitates day-to-day operations.

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