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What You Need To Know Before Starting A Ridesharing Business


The future is driverless, and ridesharing is paving the way for it. The young oligopolistic market is already worth more than $60 billion, with companies such as Uber and Lyft boasting colossal market shares in various countries across the globe. If you are looking to start your own ridesharing business, you know you are going against established giants.

So, how do you achieve success amidst their dominance? What do you need to know before starting a ridesharing company?

1. You need an app.

There is nothing magical about how Uber and Lyft operate. All they did was come up with sophisticated yet easy-to-use apps and followed them up with killer marketing strategies. The app is the backbone of any successful ridesharing company, and that’s where you need to focus your energy if you want to be successful.

A good ridesharing app should create, track, and change ride statuses at the click of a button. They should also provide driver, rider, and vehicle information. Passengers should be able to search for rides in their vicinity, and drivers should get notified smoothly and conveniently. More importantly, the app should have a simple and straightforward interface.

2. The law.

You cannot overlook the legal aspect of starting and running any business. Ridesharing is a unique industry that is bound by unique laws and regulations. Some of these laws can act as entry barriers, while others are so hidden that you may build your company oblivious of their existence.

This is why you need a lawyer for your company. Take the time to learn about rideshare accident attorneys and law firms that serve rideshare companies. Hire someone who understands the industry, and make sure to involve them in both the planning and implementation phases of your model.

3. Drivers have options.

Much like you, drivers are in the business to turn ridesharing into a money making opportunity. You have to make them feel prioritized regardless of your business objective. The working environment you provide them with should be better than what established companies offer.

As the adage goes, better the devil you know than the angel you don’t. People would rather work with the Ubers and Lyfts than risk it all with your startup if the conditions are the same.

4. Insurance and safety.

All rideshare riders care about are car availability, convenience, and safety during the journey. They want to be sure they will be compensated in case there is an accident that is no fault of their own.

You don’t have much of a choice when it comes to this. Both Uber and Lyft provide high coverage for their drivers and passengers, which has served as their primary selling point. Your lawyer should guide you on insurance, and all the options available to your startup.

5. Find your niche.

The rideshare industry is a couple of years old. It wouldn’t make much sense to build a company exactly like Lyft or Uber. If you do, it will be difficult to even sprout from the mud. Let’s face it. There is no reason why drivers and customers should use your service if you don’t offer something that others don’t have. What can you offer that established companies can’t? Some ideas include:

  • Ridesharing services for minors
  • You can focus on airport rides only
  • Ridesharing for seniors with limited mobility.
  • Ridesharing sharing services for kids – there is a huge market in metro areas such as San Francisco and Los Angeles, where busy parents spend a lot of time driving their children around.

6. Spread the word.

Once you have established your rideshare company, built an app, and have the necessary permits, it is time to spread the word. Design marketing strategies that will help attract drivers as well as customers. If you don’t have any marketing expertise, you will need someone to help you with marketing and customer relationships. It would be advisable to bring in a partner or an employee with marketing experience. Some effective marketing strategies include:

  • Word of mouth
  • Referrals – have a referral program where adopters can give their friends or family free rides
  • Reviews – having a rating system helps to promote trust
  • Discounts and free rides to first-time users
  • Social media presence – it can include paid ads, customer engagement, content creation and more
  • Influencer marketing
  • Loyalty program


Starting a ridesharing company is not as difficult as it seems. You just need to identify the market gaps and create a strategy to exploit them. From there, you can work on your growth. Use the fundamentals above to understand the market before launching yourself into the game.