Ride-hailing refers to an act when a customer orders a customised ride online usually via a smartphone application. In essence, it is similar to a taxi service. The customer orders the ride from a ride-hailing platform – a third party that mediates the service between the driver and the passenger. The best-known mediators are Uber and Lyft.
How does ride-hailing work?
The customer orders a car from an app. The app sends their location and request to a nearby driver who can decide if they want to accept the ride. If they accept the ride, the customer can see the car in their app as it rides towards them and the time it will take for the car to arrive. They also see information about the ride, such as a number plate number and the name of the driver.
Once that car has arrived, they can just get in and relax. Most of the ride-hailing platforms charge the cost of the ride straight from the customer’s card. So the users don’t even have to worry about the payment – they can just step out of the car when they get to their destination.
As opposed to ride-sharing, the driver generally does not make any stops between the starting point and destination. The drivers offer their services for a profit, and riders cannot split the cost with the driver. The payment is charged automatically and the income is shared between the mediator and the driver.