Uber is one of the most popular ride-sharing apps today. This company earned more than $31 billion in 2022, which is 82% more than in 2021. More than 131 million users used Uber and Uber Eats in 2022, which is an 11% year-on-year increase. Moreover, there are many other popular services, like Lyft, FreeNow, Sixt, Zipcar, DoorDash and GrubHub, that earn millions of dollars.
Generally, ride-sharing and food delivery services are highly demanded at the moment. They are used by millions of users, and businesses are earning billions of dollars. Market researchers predict on-demand service market growth over the next 4 years, so if you want to start such services in your city or region/state, now is the time to do it.
This market is very competitive, so you need to take the right approach to creating an on-demand product. However, building such an app can make a successful start of your startup or can expand your business and unlock great potential in on-demand service offerings. In this article, we will tell you how to build a ride-sharing app, what it can consist of, and how much it costs to build an app like Uber.
What is a ride-sharing app?To put it simply, a ride-sharing app is an intermediary on-demand service that allows passengers to order taxi cabs for rides. Such apps are primarily focused on mobile devices, which is incredibly convenient for end users. They need to make a couple of clicks on the screen, pay by card and that's it, the taxi cab or order is on its way.
Main user story of ride-sharing appTo understand how ride-sharing services work, let's consider the stages that the main process of user interaction with the app can be divided:
- Passengers make an order in the app: they choose the start and end points of the trip, the category of the cab, and some other requirements they need: for example, an extra seat for transporting a pet, a seat for transporting a child, a service for a deaf-mute passenger or a person with limited mobility.
- The app estimates the cost of the trip, taking into account various factors, such as duration of the route, city traffic conditions, the availability of free cars at a given time, and so on, and displays it to the user.
- Passengers confirm or reject the offer.
- In case of acceptance, the ride-sharing service sends the order to the drivers nearby, who can accept or reject the request. If rejection happens, the order is sent to another driver.
- Once the car arrives at the final destination, the trip is automatically paid for with a bank card or any other service that is linked to the account. The passenger also has the option to pay cash and reward the driver by leaving him a tip.
- The service asks users to put a rating to further improve the service for each party.
Main user featuresThere are two types of users involved in the main user story: passenger and driver, so a good solution is to create two different apps with their own functionality. Below in the table we will summarize features for each ride-sharing app:
Complex multi-user services like Uber-like apps need to be monitored, so there should be an admin control panel where you can control rides and respond to user messages.
How to build an app like Uber: a detailed algorithmIf you have decided to create an Uber-like app, don't rush to start MVP development right away. Before that, a long but important stage of concept creation, business model definition and design necessarily takes place. Therefore, the whole process of creating a ride-sharing app can be visualized as follows:
- Gathering information about the city or area where you are going to launch your service:
- Researching the local population;
- Identifying the potential target audience.
- Selecting the optimal business model.
- Designing your product and developing an MVP:
- Defining the functionality and necessary requirements;
- Hiring a development team;
- Developing and maintaining the product.
- Collecting feedback, growing and promoting the product.
Let's look at each step in more detail:
Gathering information and defining the target marketA smart step before an Uber-like app development is to search information about the product launch location and previous attempts to launch a similar business in the area. Let's consider this stage in more detail:
- The first step is to choose the country and city where you would like to launch your product. Each location has its own infrastructure, economy, income level of the population and, as a result, its own level of demand for various services and, in particular, transportation. For example, in your chosen city there may be a lot of services for ordering cabs or food delivery, and there are no apps for renting bicycles and scooters, which may be a signal and an opportunity for you to find a niche in the area. However, don't rush into developing a service right away, probably you are not the first person who wanted to launch a similar service in your chosen location. There may have been reasons why these products are not available in the local market, and that brings us to the next point.
- The second step is to look for information about previous experience of launching a similar business to yours in the area, and if this information is available, it is worth looking into why previous attempts failed. To illustrate, let's go back to the example from the previous point. There are many cab booking services in your chosen city and yet there are no scooter or bike rental companies. This may be because the city infrastructure is not adapted to scooters and bicycles, and therefore no one uses them. There can be many reasons for a failed launch, and it is important to understand what mistakes to avoid in order to successfully launch your own product. If you haven't found anything, then keep researching.
- Pay attention to the specifics of the area where you would like to launch. This can be a great opportunity for different experiments. For example, you could launch a helicopter rental service for shared rides instead of a ground cab rental service in a mountainous area with poor road infrastructure. A similar trick was done by Uber, which launched a submarine rental service in Queensland, Australia, to explore the Great Barrier Reef.
- If you chose a tourist destination to launch an Uber-like app, it's a wise decision, but it's worth checking what season there is active tourist traffic. This will be useful, for example, for launching a scooter rental service.
Selecting a business model and defining the value of the productNow you need to set the importance and value of your product, how it will be used and how it will bring revenue. This all goes into the Business Model Canvas and Value Proposition Canvas, which help you better understand the algorithm for creating a competitive product.
Regardless of your decision, one of the main goals of your product is to earn money, so you need a financial model also. For example, the Uber app accomplishes this by using a dynamic pricing model. It means that the cost of a ride is generated from the following factors:
- Base fare: a service fee that depends on the vehicle category and region;
- Fare for distance traveled in kilometers or miles;
- Trip time fare;
- Booking fee: A small portion of the trip cost that is deducted at the time you book your trip.
You can use all or just some of the pricing factors in your service, and depending on the decision you make, monetization can be implemented as follows:
- Commission on drivers' revenue;
- Commission on the trip cost;
- Penalty for canceling a trip.
MVP developmentAfter that you can move on to product design and development. Creating user stories is an important stage of MVP design, detailing all the features you would like to see in your application. This stage will allow you to estimate the cost and time of development.
Obviously, it is a bad idea to develop everything at once, especially if you choose an agile project management methodology, where you develop the product and implement the functionality gradually. Therefore, you should decide at the stage of MVP development, what functionality will be the main and will be included in the first MVP versions, and which will be secondary and will appear in later versions.
You will need several applications for passengers, for drivers and for service administrators. Let's take a look at the functionality of each of these applications.
Passenger’s appNo matter how clunky the server side of the MVP is, the passenger’s app should be done perfectly: this applies to its competent UX/UI, absence of bugs and errors, and a well-implemented core set of features. We describe some of the features that should definitely be included in a client application:
- Login and signup tools. Users need to register to use the ride-sharing app, as with most software products. To do this, they can use their email, phone number, as well as Google, Apple, Facebook, Twitter and many other accounts. The introduction of the latter speeds up the registration process considerably, as there is no need to enter a bunch of information manually.
- Ordering a car and canceling the order is the main functionality for the passenger’s app, which allows users to specify the start and end point of the trip, select the category of the car and other parameters and services. It's important to remember that any user can make a mistake or change their mind about driving, so canceling a trip is also an important part of a passenger app.
- Cost calculation is a difficult to implement, but very important function of the whole service, which should take into account a lot of pricing factors, such as drivers' workload, route duration, traffic jams and much more.
- The passenger’s app should have a driver location tracking feature so that the user knows in advance when they need to get off at their departure point.
- Payment. Nowadays, most services are paid using banking services, and ride-sharing apps should support this feature too. Paying with credit cards, PayPal, Apple Pay or Google Pay – give users a choice and don't forget that some passengers still pay for trips in cash.
- Push notifications are the most effective tool for informing users about different events: acceptance or rejection of an order, arrival of the car or a reminder to put a grade.
- Communication with the driver. Many issues can be solved directly with the driver without the support service. Therefore, a secure option to text or call the driver will be a useful feature for a passenger’s app.
- Rating and feedback for the driver. This is a great tool to ensure that the service can offer passengers only good drivers and turn off disreputable ones.
- User support is a mandatory part of any product, as the user should have the option to ask for help from a representative of the company providing their services.
You can also add few more features that can be nice bonuses for users:
- Split payment. If several passengers are traveling together, they will be able to split the bill among themselves.
- Delayed request. Users may plan some trips, such as going to the airport at night, and for such cases, calling a cab on demand is not always convenient. Therefore, ordering a car in advance can solve this problem.
- Ordering for another person. This feature will be useful for a user who often orders cabs for his friends or relatives from the same account. The ability to specify the phone number of the other person will be useful, so that they can keep track of the status and notifications via SMS and calls.
- Tipping the driver is a good way to thank him for a comfortable ride and good service.
Driver's appThe passenger’s app is only one part of a larger service. The other side of your service is needed for those who will be delivering it, i.e. the drivers. They should be focused on driving a vehicle, so interacting with the app should not take up a lot of their time. A small number of features should be intuitive and easy to use. Let's look at a few important features for a driver’s app:
- Driver verification tools. Not every person should get access to the driver app, they have to go through a verification process, for which they need to provide data about their driving documents: license, car insurance and more. Further verification takes place on the side of the service administrator.
- Notification of new requests is the main functionality of the driver's app, which can help drivers learn about new orders and details of the trip. They should also have the ability to quickly accept or reject the request.
- Push and voice notifications. Just like with the passenger’s app, push notifications effectively notify the driver of changes in the route, start and end points, request status, and more.
- Navigation and route optimization is perhaps one of the most complex features in a driver’s app. It must have the functionality of a navigator and be able to build optimal routes based on maps, taking into account the situation on the roads.
- Communication with the passenger. The driver, as well as the passenger, should have the ability to contact the passenger through a chat or call that will not compromise their phone number.
- Revenue reports is a section where the driver can find the information about the number of trips and money earned per day, week or month.
Several additional features can be added to make an app more convenient for drivers:
- Requests in specific locations is a feature which helps the driver to choose trips within certain areas. If a driver is finishing his shift, he will be able to select a passenger who is headed to the same area as the driver.
- Waiting time mode. If the passenger asks to make a stop for several minutes, drivers can turn on the waiting mode and the passenger will pay extra for the time spent.
- Heat map that helps drivers find new passengers in high-demand locations.
- Forward dispatch. During the current order, the driver will be able to take another one, which he will deal with immediately after.
Admin panelTo combine the two apps into a single service, you need an administration panel where company employees can answer questions and complaints from users, track analytics, run marketing campaigns and more.
Typically, an admin panel can include the following tools:
- Managing passenger and driver accounts;
- Feedback processing;
- Fares management;
- Creating cab orders;
- Payments management;
- Notifications management;
- Route Management;
- User support;
- Creating promotional campaign;
- Integration with other analytics tools, such as Google Analytics. The functionality of the administration panel depends on the technologies used, which we will discuss below.
Development tools for building an app like UberIn this section, we discuss a bit more about the tools and technology stack that will help your development team on how to build an app like Uber. Uber has recently developed and released its own API to create your own ride-sharing service. But beyond that, there are other tools that allow you to create the service you need.
There are several programming languages and APIs for each operating system. First of all, Kotlin and Swift languages will help you to create mobile apps on Android and iOS platforms respectively. The server side is created using back-end languages like Python, Java and PHP and frameworks like Node.js. Choose the back-end language carefully, as the functionality of the admin panel will depend on this choice.
When developing an Uber-like product, you can take advantage of API integrations with other services for the three big sections of your service:
- Geolocation and navigation. Any ride-sharing service is tied to working with maps, so you will definitely need the CoreLocation framework for iOS and Google Location Services for Android. To make navigation work in your app, you can use MapKit and Google Maps Android API frameworks.
- Notifications and communication. You can set up a connection to system notifications for your app using Apple Push Notifications Service for iOS and Google Cloud Messaging for Android. It is important to organize users' notification via SMS in case the device is out of internet access. Plivo, Sinch, and Twilio frameworks are suitable for this purpose, which will also help you create in-app text chats.
- Payment gateways. In order to implement payment tools in your application, you need to create all the necessary secure infrastructure and get PCI certification, or use tools from Braintree and Stripe, which already have the necessary level of security configured. Google Pay and Apple Pay integration will be important.
We have compiled all these tools into the table:
Gathering feedback and product adjustmentAfter developing an MVP and collecting feedback, you need to go through all the previous development steps to refine the product and offer new functionality that your users will love.
A good way to organize further work is to have a retrospective meeting where the team reviews all the work done and identifies good and bad decisions. After that, another meeting is held, where ideas for further implementation are developed, the next sprint is planned and a new development cycle begins.
How much it costs to build an app like UberOne of the most interesting questions is about how to build an app like Uber for free. Of course, you can find several free app builders on the web to design the MVP you would like to create. However, when it comes to a full-fledged product development, the builders won't help you anymore. Therefore, at the end, let's touch upon the question of how much it costs to develop a ride-sharing app.
- Obviously, the cost is directly related to several factors that can increase or decrease the development time:
- The amount and complexity of functionality in your service
- Complexity of the interface of your service
- Number of platforms
- The capabilities of the development team
The entire service development can be divided into several stages:
- Business analytics
- Project management
- UX/UI development
- Server-side product development
- Mobile development for iOS and Android
- Testing To calculate the cost of application development, let's take a rough estimate of the working time and multiply it by hourly rate of $50 (this is an average development rate in Eastern Europe).
We also developed the admin panel for proper system interaction which takes around 240 – 260 hours. It consist of the following:
- Authentication tools
- Admin profile
- User management
- Fares management
Estimates show that developing a minimal version of a ride-sharing service can cost about $113,000 at an hourly rate of $50. However, if you want a more advanced and functional service, the development cost can increase several times. Note that this cost does not include business analytics, project management, meetings, planning and marketing campaigns.
ConclusionAs you can see, there are many nuances and details in creating an Uber-like app. It is not an easy task, but if it is properly structured, the creation will become a simple process, and your product will start to bring benefits and expand your business.
In this article, we broke down in detail how to build an app like Uber, learned about its features and functions you can use to create your own on-demand product, and found out how much it can cost.
If you want to build your own ride-sharing app or any other on-demand product, feel free to contact us. We'll be happy to answer your questions or come back with a development time estimation.