How to Start a Rideshare Company


Itís the 21st century, and taxis are old news. These days, ridesharing apps are where itís at. And thanks to some of the bad press plaguing ridesharing giants like Uber and Lyft, thereís a lot of interest in alternative services. That means itís the perfect time for you to start your own ridesharing company and get a piece of the action. But how?

You might be surprised to learn that the legalities of starting a ridesharing company arenít that complex. The hardest part may be finding your niche and getting the word out. But before you can start picking people up, youíll need to establish your business entity and get the appropriate permits and insurance. Youíll also need to develop a ridesharing app to help customers schedule rides. The rest is a matter of hard work and luck.

Find Your Market Niche

With big, well-known competitors in the rideshare market, youíll need to find your niche. What can you provide that your competitors canít? Is there a market for services that big companies like Lyft and Uber canít provide? Consider what ridesharing customers want and where the big names might be falling short.

For example, one problem lots of people have with companies like Uber and Lyft is the fact that they donít feel safe taking these rides. Theyíre not comfortable with the level of vetting these companies do when hiring drivers. Others want the option to order a rideshare big enough for the whole family, but worry that drivers wonít have car seats for young children or enough room for more than a few people.

Drivers have issues with ridesharing companies, too ó they feel underpaid, they want more stability, or they simply worry about what will happen to their livelihood as driverless cars take over. Thereís plenty of room for ridesharing options that provide better driver protections, more security for passengers and passenger options that arenít available from conventional ridesharing companies, like car seats, scheduled regular pickups, rides for minors or even accommodations for the handicapped.

Establish Your Business

The first step toward making your business idea a reality is registering your business. If youíve already done some driving for Uber or Lyft, youíve been working as a sole proprietor, but to start a ridesharing company, youíre going to want to choose a more structured business model. Forming an LLC may be the best option for you because it combines the pass-through taxation of a sole proprietorship with protection from personal liability.

Get Your Permits and Insurance

Drivers in your rideshare company will be using their own cars, so you probably wonít need to register as a taxi company because you wonít have a fleet. However, youíll probably need to get Transportation Network Company (TNC) approval. This process varies depending on your state. In the state of California, for example, youíll need to meet a number of requirements, including having an app passengers can use to arrange rides, paying fees to the California Public Utilities Commission and performing background checks on drivers. Check with your stateís Public Utilities Commission or Department of Revenues to find out whatís required.

You may also need to get some insurance before you start giving rides. You might not need commercial insurance, since youíre not a taxi company, but your drivers might need some rideshare-friendly insurance to cover passengers and damages sustained in the course of doing their jobs. You can either provide this for them or require them to buy it themselves from an auto insurance company.

Develop an App

To operate as a legit ridesharing company, youíll need to develop an app that passengers can use to schedule and pay for rides ó that means no street hailing! Not a software developer? Thatís not a problem. You can hire a freelance developer to build your app or use a company like RideCell to help you create the passenger app experience youíre looking for and hash out the other details of your services, too, so you can give your target market exactly what it needs.

Get the Word Out

Once youíve established your business entity, developed your app and gotten your legalities taken care of, itís time to get the word out. Youíll need to start signing on drivers as well as attracting customers. Youíll need a budgeted, targeted marking plan that will reach both potential customers and potential drivers. If you donít have any marketing expertise, itís not a bad idea to bring in a partner or employee who can help with marketing and customer relationships.

If youíve always dreamed of working for yourself, itís a great time to get into the rideshare business. You can succeed by offering services your competitors canít, donít or wonít offer, to create driver and passenger experiences that surpass those available even at the big names in ridesharing.

Image: Ride share application in mobile phone from Tero Vesalainen/Shutterstock