Starting a Ride Sharing Business
There are very few businesses in the world that have seen the kind of immense boom that the ride sharing market has experienced through the years. In just a short amount of time, ride sharing went from a relatively unknown business to one which majority of people simply can’t do without.
And yes, as in all businesses, the biggest winners were the early adopters, but that is not to say by any means that the market is closed. With the right approach and strategy, you, too, can carve out a significant share for yourself from this profitable pool.
Below we take a look at everything you need to know to start your ride sharing business and make it a truly successful one.
The first step in starting a ride sharing business, just as it is with pretty much any other business, is research. So what are the things you have to research in this case? Well, you start with the market in general.
Things are usually different behind the scenes than they appear from the outside looking in. So try a ride sharing service. Talk to the drivers. Talk to the people. Talk to people with experience using multiple services.
What are the advantages they offer? What are the disadvantages? What can be improved upon? What can YOU improve?
Standing Out Before You Begin
Uniqueness is an incredible edge to have as an entrepreneur. The thing about uniqueness, though, is that there are multiple sides to it. There is standing out in the way you operate, and there is standing out before you even begin operations.
Here, we’re talking about the latter. You see, before you even start the actual business, you must have something that separates you from the group. Yes, you’re going to be in the ride-sharing business, but what separates you from every other business in the same niche?
There are many ways to stand out here.
Firstly, you could consider running the same business but with a different target audience. So instead of catering to everyone, you may niche down to students, or travelers at the airport for example.
Everyone wants to go big, but the biggest strategy may be to narrow down.
Secondly, you could differentiate yourself by offering a different luxury experience with luxury cars. Or maybe go the eco-friendly way. The potential is limitless.
Once you get the pre-operation uniqueness ready, the next step is to brand yourself. This is another way of creating a special air around your business. To do this, you obviously have to choose a unique and catchy business name.
This will be the very first link between you and everyone else you will be dealing with from this moment onwards.
Secondly, get a domain name for your business name. Ideally it is something short and simple, with the potential to be popular but not popular yet. This way, your domain name is easily available and you’re ready to take the next big step.
Rates and Percentages
Next up you’re going to want to figure out your own rates and percentages. Will you go with the standard? Will you do something different?
What are the profit margins with different rates? Do you want to focus on being profitable from the start, or will it happen further down the line?
All of these are important things to consider, not just for yourself but for the next step on the list.
You can’t talk to investors without understanding the intricacies of the business yourself. No one will take you seriously. And that is where all of the above steps will pay off.
Once you’ve done your research and identified your rates, percentages, and profit margins, you can then begin to talk to investors. Show them your vision and maybe they buy in.
If they do fine, if they don’t, move on to the next investor. Or even do it yourself if you can afford it.
Uber was created with $200,000 capital. Once you start with limited capital and start good, it becomes easier getting investors down the line. In fact, they’d be the ones begging to join you.
This is where the serious business begins. The actual operation. Obviously as a ride sharing business, you need an app. So ideally this is where you build your app
Decide what kinds of data you’ll require for sign up. Email address or social accounts? Will there be a need for an ID?
What kind of chat systems will you employ? And so on.
Standing Out in Operation
We talked about standing out in approach and identity. Now is where you stand out in the actual way in which you operate. You do this through extra features on your app.
They can be really cool and innovative features or just attractive incentives. For instance, you may allow riders to choose preferred car models.
You may also allow riders to schedule their rides way before time. All of these are examples of features that can help you stand out while you operate.
Driver – Focused Programs
Drivers represent you. As such they are one of the major backbones of your ride sharing business. Create driver training programs as a way to not only orientate your drivers regarding the ethos of the company they work for, but also how to properly carry themselves in a way that ensures everyone benefits.
You must also come up with a screening process through which you eliminate drivers with bad history and behavior.
So all the work is done. You have a viable product and an impressive mode of operation. What’s next? Getting the word out there.
It is true that in some cases, the product is so good that it sells itself. But this is rarely ever the case, especially in such a lucrative and competitive field like ride sharing.
To ensure success, you’ll have to carve out a chunk of your budget for marketing. And the first step? Building a website.
Your website, ideally, would be where new customers come to learn more about your business. This, alongside your social media pages, will be your first line of communication.
Effective marketing is no walk in the park. While, technically, you can do it yourself, it is more advisable to hire a dedicated marketing agency with prior experience in the field – if you have the budget.
An agency would be best suited to formulate all marketing plans, both digital and traditional, along with building strong online presence on social media.
At this point, all that’s left is the legal aspect. Now this isn’t a piece of cake by any stretch of the imagination, but at this point you should be feeling pretty good about yourself.
You have come a long way.
Most of what’s involved in this step is what you and your lawyer can finalize without encountering impossible challenges. To begin, you first have to make sure your company is legitimate.
You make your company legitimate by registering with the appropriate body or bodies depending on your location. You also want to be sure of what kind of company you will be building.
Most start with a simple limited liability company (LLC) before moving on to corporation status if need be.
Both of these company types ensure legitimacy, allow you to pay taxes conveniently, and provide liability protection with the law.
Compliance and Permits
Once you’re successfully registered as an LLC or Corporation, you can then proceed to obtain legal documents for your company. Among these, for example, is the Transportation Network Company permit in the USA, which gives your ride sharing business legitimacy in the eyes of the Public Utilities Commission.
For more information you can easily contact the appropriate government offices in your area and get all the information you need before you proceed.
Any business needs strong insurance, and the ride sharing business is no different. Unforeseen circumstances should always be accounted for, and in a business with literally so many moving parts, most of which are beyond your control as an owner, getting a strong insurance can go a long way in helping you sleep better at night.
Last thing you want is to beat the odds and get your business on a successful path only to be derailed by an unlucky accident you could have easily been insured against.
In some countries and states, all rideshare businesses must have a level of insurance.
There you have it – how to start a successful ride sharing business. Obviously from the above, it is clear that this endeavor will not be a walk in the park.
If you do it right, you will have long nights and discouraging days, but the trick is to persevere and be thorough. Go through every step meticulously and be true to yourself.
Once you do this, you will no doubt come through with a smiling face at the end. The reward, without a doubt, is more than worth it.