Need a ride? Book it on your favorite transit app. Ride-hailing has become a go-to mode of transportation for riders who are always connected thanks to their smartphones. Want to get a handle on ride-hailing to make it work for your agency? Follow along to learn what it is and how it’s replacing traditional transit models, plus get insights into whether there’s a better way. 

What is ride-hailing?

Believe it or not, the name says a lot. Ride-hailing is when riders use an app to “hail” or request a local driver to pick them up and take them to a specific location. It’s flexible, too, functioning either on-demand or for rides scheduled in advance and providing private or pooled rides. Ride-hailing is all about getting from Point A to Point B seamlessly via a third party.

But even today, riders and agencies alike confuse ride-hailing with other modes. There may be some crossover, but ride-hailing is still unique from the rest, including:

  • Ride-sharing: Paid, pooled trips for multiple independent riders to share one vehicle
  • Taxis: Paid, private transportation that isn’t usually pooled
  • Carpooling: Independent transportation where a known driver offers a ride to passengers going to the same place to lower their collective transportation costs 

How does ride-hailing work?

In ride-hailing, customers order their rides from a third-party app, which coordinates between driver and passenger. In general, the process follows a few basic steps:

  • Rider orders a car from the app—complete with payment.
  • App shares location and request data with nearby drivers.
  • Drivers can accept or decline ride requests.

Once a driver accepts, the customer gains visibility inside the app of where the driver is and their ETA as the driver approaches for pickup. Come pickup time, there’s just one thing left to do: Sit back and enjoy a nonstop ride!

How is ride-hailing growing?

We’re at the point now where it’s hard to remember a time before third-party mobility. Scheduling a ride has become second nature, more so even than starting a car. Embracing it as commonplace lends to continued ride-hailing growth.

Ridership is increasing.

The global ride-hailing services market size was $28.34 billion in 2021, but that pales in comparison to where it’s headed. In fact, while COVID-19 temporarily drove down public transportation ridership, ride-hailing is still on pace to expand at a 15.7 percent compound annual growth rate through 2030 to a staggering $104.93 billion.

It’s getting more popular as it becomes increasingly convenient and economical. Think about how the rising costs of car ownership—from fuel to maintenance—make ride-hailing and transit less expensive. Tech is a big draw, too; riders enjoy only needing their phone and an app to request rides.

What does the future of ride-hailing look like?

The numbers alone are enough to show that ride-hailing is here to stay. But it’s still in competition with ride-sharing services. 

Compare ride-hailing and ride-sharing.

It’s easy to use the two terms interchangeably, but ride-hailing and ride-sharing aren’t identical. Both ride-hailing and ride-sharing increase flexibility, convenience, and affordability for riders, enabling riders to use a mobile app to search, book, and pay for their trips.

Of course, how the two impact the larger travel landscape differs. For instance, ride-hailing doesn’t always reduce traffic and pollution because it only replaces about 20 percent of trips, but ride-sharing reduces the number of vehicles on the road at once and limits emissions.

Lead the way with MaaS.

Ride-sharing and ride-hailing are just the start. Mobility as a service (MaaS) is the future of transportation, delivering seamless on-demand transportation to riders via an app no matter where or when they need a ride. MaaS also helps agencies like yours optimize your fleets and keep moving with advanced software that calculates the best route and modes of transportation.

X4MaaS, Ecolane’s multimodal trip planner app, supports trip planning and booking across fixed-route, paratransit, microtransit, on-demand, ride-sharing, third-party mobility options, and more. The fully ADA-compliant solution allows riders to book trips across modalities in one mobile app or with interactive voice response systems such as Alexa, Google Assistant, or Siri, syncing with your schedule in real time.

And automation is key. X4MaaS takes fare validation and ticketing into the mobile platform, so agencies can provide cashless and queueless boarding, reducing dwell time and fare collection costs. On top of this, push notifications remind riders of upcoming trips, decreasing trip loss.

Accelerate your microtransit.

Ride-hailing, taxis, carpooling, and ride-sharing—there’s certainly no shortage of options for people to get moving today. Riders can save fuel and money in the long run from the palm of their hands, while agencies can deliver seamless multimodal solutions. Flagging down rides or calling to schedule service are in the past with mobility driven by app technology. 

Are you Team Ride-Hailing or Team Ride-Sharing? At Ecolane, we’re Team MaaS, knowing it integrates all the benefits of the growing tech-enabled transit landscape. The future is bright for each, feeding into the trend toward microtransit. Do you want to stay ahead? Let Ecolane lead the way! Explore our guide to microtransit for insights into how your agency can adapt and transform.