People all over the world want to get the best deal on any service or product. When it comes to spending money on a daily basis, they always try to spend it in the most efficient way possible. This is now possible on a daily basis thanks to ride-sharing.
Ride-Sharing is a method of sharing-based payment ride service in which a person can travel with another person by splitting the cost of their ride. For example, if A wants to go to location N and B wants to go to location M, which is closer to location N, these two people can use Ride-Sharing.
This mode of payment for this transportation caused people to spend less than they would have if they had not used the service in an optimised manner. It is a method of obtaining the same service for a lower cost than the actual ride cost. This ride-sharing concept was pioneered by Sidecar, a US-based start-up company founded by Sunil Paul in 2011, and has since been followed by start-ups like Lyft and big names like Uber by providing the same kind of services "Ride-Sharing." Lyft shares many similarities with Sidecar, but Uber is a completely different platform that has entered this platform as part of its business expansion.
What are the primary distinctions between ridesharing and ride-hailing? What is the most profitable business to start? Read our blog to learn more about the differences between ridesharing services and ride-hailing apps.
The sharing economy has been around since the days of Airbnb and Uber. Its main goal is to provide high-quality peer-to-peer services. For example, instead of staying in a hotel, you can rent an apartment from a local. For example, instead of owning a car, you could book rides with Uber or Lyft.
So the most important aspect of the sharing economy is that we no longer need to own vehicles, real estate, or anything else as long as we can book or borrow them through a convenient app. Booking applications are the driving force behind this model, and technology has literally made it all possible.
In any case, there is still a lot of ambiguity about the various types of business models available in the sharing economy. For example, at Onde, we frequently receive the following inquiries:
What exactly is the distinction between ride-sharing and ride-hailing?
Is Uber a taxi service or a ride-sharing service?
Is it more profitable to use ridesharing or ride-hailing?
Let us take a look!
To rideshare or to Uber — mobile apps that make life easier
Uber and Lyft are frequently referred to as carsharing or ridesharing services. This is, once and for all, incorrect! Why?
In the case of ridesharing, drivers are not employed by the mobile app. A ride-sharing app connects a passenger with a car owner who will give them a ride for free or for a fee. One can get a ride by the seat (and share it with other commuters) or by the car (ride with the driver alone).
Ride-hailing apps like GoJek connect passengers with nearby taxi drivers. These taxi drivers are employed by a taxi company and make themselves available through a booking app.
Ride-hailing services are more common in big cities — in fact, it's just the new way to get a cab quickly, conveniently, at a reasonable price, and with confidence that the service is good. Ridesharing apps, such as Via, BlaBlaCar, or Lyft Line, are only useful if you're going in the same direction as the driver; otherwise, you might not get one.
Is Uber a taxi service or a ride-sharing service?
As a result, Uber (along with Lyft, Gett, and many other companies with a booking app) operates as a ride-hailing service in the majority of countries. Despite the fact that they do not employ drivers, they frequently work with taxi chauffeurs who do driving as a full-time job, not as a hobby.
For many people, especially those living in cities, ride-hailing apps are the best alternative to owning a car. It saves a lot of time and money — just think about how ride-hailing eliminates the need to park, pay maintenance, and taxes on a vehicle, not to mention obtain a driver's licence.
In congested areas (such as San Francisco or Los Angeles in the United States), using ride-hailing often means a significant increase in productivity.
Ride-sharing and carpooling are popular among people concerned about the environmental impact of car ownership. It's quite popular in many European countries, for example, but not so much in North America.
Which is more profitable, ridesharing or ride-hailing?
The short answer is that it makes no difference. In one case, a business model may thrive while shrivelling in another. Many factors influence it, including the local market situation and the culture surrounding public transportation, as well as having a realistic plan and clear ideas about how the business will generate profits.
Ridesharing services — earn a commission from users who are matched.
You can launch a ridesharing app that connects people with someone they'd like to pick up for a ride and charge a commission for each ride made. While such rides will be less expensive than those provided by Uber, if the service is popular enough, your business will thrive.
In this case, the drivers will not work for your company; instead, they will pay you a fee for each ride they take. One of the reasons many startups prefer a ride-hailing model is the inability to control the quality of the services delivered.
Ride-hailing services should outperform traditional taxis and Uber.
Ride-hailing is the way to go if you want to launch a booking app that allows people to hail a cab using their smartphone.
The ride-hailing industry is growing and is expected to show impressive results in the coming years as a more convenient alternative to public transportation. Allow your customers to enjoy the convenience of a taxi ride combined with technological advancements such as real-time driver tracking, multiple drop-off points, multiple payment options, and more.
However, there is no way to predict which business idea will be the most profitable in your specific circumstances. Everything matters in the battle for the most profitable enterprise: target audience, market positioning, advertising and publicity efforts, and, of course, pricing.
The need for a dependable technological solution is something that both ride-hailing and ridesharing businesses share.