Ride-hailing and ride-sharing services are in demand businesses nowadays, providing convenient transportation to all types of riders. If you’re planning to offer any of these services, it’s important to equip yourself with the right information, so you can generate good profits.
With a reliable ride-sharing or ride-hailing platform, one can offer ‘trip pooling’ (or carpooling) to riders, which helps drive down operations costs, passing them down to riders. Administrators and dispatchers can simplify their operations without pen and paper because everything is available on ride-hailing and ride-sharing apps.
But what are the differences between these two trending transport services? In this article, you’ll learn the differences and similarities between ride-hailing and ride-sharing services.
A rider hires or hails a personal driver in ride-hailing. The driver takes the rider (sometimes the rider has a companion) to a single destination. Ride-hailing doesn’t make several stops or share the transportation vehicle with a totally different rider. Most ride-hailing companies restrict passengers up to three.
On the other hand, ride-sharing services are the exact opposite of ride-hailing, wherein several riders can hire a single personal driver to take them to places they want to go. Shared ride allows riders to use the open seats to full advantage. Passengers can be paired with other riders along the same route. The order of pickup and drop-off can vary in each ride. Sometimes a rider can be the first or the last, depending on the route and pickup and drop-off points.
With ride-hailing, passengers can book their favorite drivers two hours to four weeks in advance. Riders who utilize the ‘schedule a ride’ or reserve feature see their fare upfront and their driver.
On the other hand, ride-sharing involves scheduled rides. Riders can also plan by scheduling a ride, usually, up to seven days from the preferred pickup date. Most often than not, a ride-hailing service offer more flexible scheduling options since they cater to single-destination passengers.
When you're planning to operate ride-sharing services or a ride-hailing business, you need to understand that drivers are independent contractors or gig workers, and not employees. Therefore, if you decide to enter into this business, you cannot withhold taxes from ride-share payments. It means you need to file your taxes because you’re an independent business owner.
In the state of California, however, ride-sharing and ride-hailing drivers are classified as employees in the recent California labor law. Because of this new law, drivers should be given minimum wage protection and employment benefits.
Ride-hailing companies usually provide a grace period if the rider isn’t available yet or is running late. If the driver is late, ride-hailing companies usually offer on-time guarantee in a form of a cash card credit, or a rider can cancel the ride without any penalty.
For ride-sharing services, riders can add a stop to help them easily drop off or pick-up another passenger, or run a quick errand. Riders should at least keep their stops to less than 10 minutes. Service fees also apply if the driver is asked to wait in ride-sharing.
A 2018 paper suggested different ways to ensure passenger safety when using ride-sharing services such as installing mandatory dash cameras in the rides. They can also set up a watchdog network to monitor rides and contact authorities in case of emergencies. Other suggestions include putting a visible company’s sticker in the car and adding a distress alarm features on the app so riders can report discomfort or suspicious behavior.
Safety features are now available to riders, which are currently offered by both ride-hailing and ride-sharing companies. One such feature is location tracking. Drivers are also required to undergo mandatory training to ensure community safety while using these riding services. Also, some companies are now developing a system to predict when you should have arrived at the intended destination, and to check in to ensure rider safety.
Online reviews or feedback systems are important to a transportation network company. Riders are given the opportunity to share their feedback to motivate drivers to provide excellent services to more and more passengers. It’s also a way to remove unsafe drivers from the service.
There are many differences and similarities between ride-hailing vs ride-sharing services. Both services use digital technology, including mobile devices and the internet to initiate transactions.
So, if you’re planning to venture into the transportation network business, it’s crucial to know how it works. In this way, you’ll know your legal obligations both to riders and drivers. You may ask more details from your local or state business and labor offices to keep you informed.