What is Ride-Hailing? (Comprehensive Guide)

The number of people in need of convenient transportation is on the rise.

The trend has led to a surge in demand for services offered by rideshare companies.

If you are looking for an alternative way to travel when you’re not using your car, bike, or public transport, you are in the right place.

Key Points

  • Increasingly people prefer to have access to multiple convenient transport options.
  • However, people often confuse “ride-hailing” and “ride-sharing.”
  • Technology has enabled ride-hailing companies to offer more efficient services.
  • In-app services can extend beyond ride-hailing.

This post will help you understand what ride-hailing is. You will also discover how different it is from ride-sharing.

The article also looks at the biggest ride-hailing companies and how the concept works. 

Let’s dig in!

3D Render spaceman ride hailing new york city taxi

What does ride-hailing mean?

Ride-hailing involves hiring a personal driver to take you to your destination. Initially, people referred to this as a taxi service.

Nowadays, more ride-hailing platforms allow you to hail a ride from anywhere.

It bears many similarities with ride-sharing, and many people confuse the two.

The critical difference is that ride-hailing drivers are typically not going in the same direction as their passengers.

Instead, they have the flexibility to take alternative routes suitable for the passenger’s needs.

Moreover, the driver will not pick up other passengers moving along the same route.

How does ride-hailing work? (Steps)

Here are the steps a person using ride-hailing takes:

  1. The customer orders a car using a mobile app.
  2. The app then sends the client’s location and request to a nearby driver.
  3. The driver will decide if they want to accept the ride.
  4. If they accept, the customer can see the car in the app as it rides toward them.
  5. The app also shows how long it will take for the ride to arrive (they can also see the car’s plate number and driver’s number).
  6. Once the car arrives, the customer gets in and relaxes.

Most ride-hailing platforms charge the cost of the ride on your card. Therefore, you don’t have to worry about payment.

The costs are also transparent to both driver and the customer.

What does “ride-sharing” mean? (compared to “ride-hailing”)

Ride-sharing is where several riders go to their destination by sharing a single vehicle heading in that direction.

The car has to make several stops along the way, picking up and dropping off passengers. As a result, it reduces the need for multiple cars on the road.

You can consider it a form of shared mobility, but it differs from car-sharing.

Car sharing usually involves a single car used by multiple drivers for a fee. On the other hand, ride-sharing allows riders to share a route and not a vehicle.

Ride-sharing is very similar to carpooling. But, ride-sharing is mainly an on-demand transportation option and does not require prearranged agreements between carpoolers. 

Moreover, ride-sharing reduces traffic congestion on the streets and also reduces carbon emissions.

What is the difference between ride-hailing and traditional taxis?

VehicleThe vehicle is not shared among multiple riders for a trip.Multiple riders going in the same direction share the exact vehicle.
StopsThe vehicle does not make any stops until the client reaches their destination.The vehicle makes multiple stops picking up and dropping off clients.
Driver statusRide-hailing services use proficient drivers employed or contracted by ride-hailing companies. Therefore, you are like to get more professional services if you use ride-hailing services.Ride-sharing drivers are not employed or contracted professional drivers.
Precision and efficiencyRide-hailing has integrated emerging technologies such as mobile apps making it more precise and efficient. The technology makes the process of connecting clients with ride hailers more efficient.Taxi does not benefit from the precision offered by technology because most drivers are independent.
Unfamiliar routesRide-hailing drivers can use digital maps to make it effortless to locate unfamiliar routes.Independent taxi drivers might not be willing to embrace certain technologies like digital maps to help them use unfamiliar routes.
SecurityRide-hailing vehicles are usually heavily insured. The insurance covers the driver, passenger, and passersby.Taxi vehicles don’t have such a level of coverage. However, there are conversations are ongoing to improve the situation.
Environmental impactRide-hailing may not be very helpful to the environment because vehicles transport one passenger at a time.Ride-sharing reduces the need to have many vehicles on the road. This helps reduce the amount of carbon emitted into the environment.

What is the meaning of e-hailing?

E-hailing is when a passenger orders a car, taxi, limousine, or any other form of transportation using a virtual device like a mobile device or computer. Currently, most operators offer mobile apps which riders can use to locate a driver in their locality.

Which are the biggest ride-hailing companies?

Ride-hailing uses a more structured operational model.

Most drivers operating under this model must be registered and licensed before they begin operations. The drivers operate under ride-hailing companies, some of which have created their names by offering unmatched services.

They achieve great success by setting very high standards, which all drivers must meet and keep. Here are the biggest ride-hailing companies in the world.

Uber Technologies Inc.

Uber Technologies Inc. is a renowned ride-hailing company based in California, US. It offers ride-hailing and food delivery services in more than 85 countries globally. The Uber app is particularly very popular because of its ease of use. The company has employed several business strategies to ensure its growth is sustainable.

It enhanced its digital platform and payment processes making it more convenient hence improving the overall service experience. In addition, it expanded its presence into emerging economies capitalizing on revenue growth prospects in many unexplored markets.

Uber launched Uber Green services in January 2021 in more than 1400 towns and cities in North America. The project offers passengers electric and hybrid trips helping the company move towards its goal of becoming a zero-emission platform by 2040.

ANI Technologies Pvt. Ltd.

ANI Technologies owns Ola, a leading transportation network based in Bangalore, India. It is a start-up that connects riders and drivers using an online ride-hailing platform. Apart from India, the platform also offers its services in Australia, New Zealand, and the UK.

The platform is also going green as it is mainly focused on providing an electric car fleet on its platform. It aims to achieve this goal using Ola Electric Mobility, ANI Technologies Pvt. Ltd.’s electric wheeler manufacturing company. It plans to use the company to manufacture 100,000 strong networks of electric vehicle chargers in 400 Indian cities in the next five years.  

Lyft, Inc.

Lyft, Inc. is the fastest-growing ride-hailing app provider in the US. The corporation is based in San Francisco, California.

Moreover, it runs one of the most extensive multimodal transportation networks in the US and Canada.

The company uses its technology platform, user network scale and density, and the data it collects to continually improve and create new offers. For example, it launched the wait & save function, which makes the riders save when they have to wait for a long.


Gojek was established in Jakarta, Indonesia, where it operates. It is a multi-service on-demand platform that offers services such as shopping (GoMart), motorcycle ride-sharing (GoRide), and delivery (GoSend).

It has been steadily growing since its launch and offers over 20 services through its app.

Additionally, it connects consumers to over 2 million driver-partners who provide reliable services. It also focuses on electro-mobility to make its fleet emission-free.

Didi Chuxing Technology Co.

This company was established in Beijing, China, and grew to become among five of the biggest ride-hailing apps globally. The corporation operates in Asia, Australia, and Latin America, with over 550 million users.

The organization offers multiple transportation services such as taxis, luxury, bikes, buses, and e-bike sharing. It also partners with automakers, the taxi industry, and legislators to expand its global footprint. For instance, it signed a deal with Toyota in 2019, which saw the motor manufacturer invest $600 million in the corporation.

What does a ride-hailing app mean?

A ride-hailing app is a mobile application that connects passengers and local drivers using their personal vehicles. However, when you look at five of the biggest ride-hailing apps discussed above, they have certain features. Here is how ride-hailing apps work:

Multiple service offers

All the hail-riding super-apps provide more than one service. Therefore, when you install a ride-hailing app, you will enjoy several services. Examples of other services you can enjoy on the apps include dry-cleaning, girls-drive-girls, and delivery services.

Geolocation and car tracking

Lyft made its name in the ride-hailing industry thanks to its ability to offer reliable cabs always on time and where you want them. Therefore, the secret to top-quality ride-hailing services is geolocation tech.

The technology ensures drivers get to where their clients are without having to call the passengers. Also, it lets dispatchers see the drivers’ exact location making their work easier.

Transparent pricing

Having a no-nonsense and transparent fare policy makes a ride-hailing service more trustworthy. Also, the app shows passengers an estimated ride cost before pick up, making it convenient for drivers and passengers. Moreover, some algorithms enable users to customize rides making them more affordable.  

Multiple payment methods

The best ride-hailing apps offer their clients multiple payment options. However, those that allow passengers to pay by card have become the most successful because the drivers and passengers enjoy more safety.

On the other hand, cash should always be an option. In short, apps that have more payment options usually attract more passengers.

In-app communication and tipping

Ride-hailing apps also come with communication and tipping options. In-app communication features include push notifications, messages, SOS buttons, and SMS. In addition, these features ensure that drivers and passengers can communicate.

In-app tipping is also a critical app. It allows taxi drivers to get rewards more often. Happier drivers mean better services for clients, right?

Regular feature updates

Clients love apps that are updated regularly. The updates come in two different forms: updating current apps and introducing new features based on data collected from app users.

Referral programs

Ride-hailing apps use referral programs to allow customers to enjoy discounts on their smartphones. This is an excellent way of encouraging current clients to market their services to friends and family.  

Tips for riding with the ride-hailing service

Here are excellent tips for using the service:

  • If you are riding by yourself, always sit in the vehicle’s backseat.
  • Beware of traffic conditions. Riding hailing services are not the best option during rush hour and special events.
  • Ensure you read the service terms to know the fees you are liable for.
  • At the end of your ride, the driver and passengers rate each other. If many drivers give you a low rating, it might cause other ride-hailing service drivers to refuse to provide you with a ride. In extreme cases, the ride-hailing service might ban you from using their services.

Final Thoughts

Ride-hailing is a very convenient and secure mode of on-demand transportation.

Using ride-hailing apps will increase your transport options and reduce costs.

Technological innovations have enabled ride-hailing companies to offer their clients better services.

Some of the most popular ride-hailing services in the world are Uber and Lyft. Ride-sharing can also be a good option under certain circumstances.

Are you ready to take a ryde?

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