A 360 Degree Overview Of Uber Revenue & Business Model

Lori Caricofe
9 min readJan 6, 2021

Get A Ride When You Need One

While perplexed, 2020 has been an enthralling and challenging year for the growing on-demand industry. And, beyond a shadow of a doubt, 2021 is at all time high to be the next BIG e-startup with an on-demand business model like Uber.

But, before you start, have you ever wondered how mammoths like Zomato and Uber crafted a nook for itself? The answer is simple; they build an on-demand business model that gives their venture a kickstart to achieve height.

If you are funnelling down choices to have an escape to the e-startup aisle, an on-demand business model is a gospel for your entry. But, as you put on the thinking cap, there arise numerous questions in your head, and here, we are ready with all your answers.

The 2021’s Market Overview

For 2020, the global IT industry acted like a catapult in terms of overall revenue. Also, according to the research consultancy IDC of August 2020, the worldwide revenue projected was $4.8 trillion for the respective year in comparison to estimated 5.2 trillion.

And, if this number holds, it will present a growth of 4.2%, signalling a rebound of the trend for the waning industry which was on prior to the pandemic.

Still, curious to uncover the insights of the future?

IDC predicts the pattern to continue, estimating a five percent compound annual growth rate (CAGR) for the industry through 2024.

Did You Know!

The USA is the most prominent technology market globally, representing 33% of the total, or roughly $1.6 trillion in revenue for 2021.

Across the globe, the technology segment along with experienced app developers accounts for a behemoth portion of economic activity. In a report by CompTIA’s Cyberstate, it’s stated that the economic impact of the U.S technology sector, scaled as a percentage of gross domestic product, eclipses many industries consisting of transportation, construction and ecommerce.

From the above image, it’s clear that the bulk technology spending uprooted from purchase history. On the contrary, it’s difficult to classify portions coming from household spending than the purchases made from government or big organizations.

Thus, considering the upsurging number, it’s undeniable to turn a blind eye to the truth behind the buzzword.

How To Define An On-Demand Business Model?

There are numerous definition of an on-demand business model available in the market, but, in clear words, any business offering instant delivery or scheduled delivery of product or service at the doorstep of customer 24*7*365 through state-of-the-art technology tools is to be called as an on-demand business.

Although the business timings and delivery schedules are flexible, this business model focuses on the customer requirements with due diligence towards the key stakeholders. And, one of the fore-runners of the on-demand business model and excerpt of on-demand business economy is “Uber”.

So, if you are planning a ride-hailing on-demand service, who will you rhapsodize?

The common answer is Uber. Now, the question arises, what is actually uber? How does the uber-business model work?

What Is Uber?

Uber technologies. Inc, popularly known as Uber is an America rooted company offering vehicles for hire, package delivery, food delivery, couriers and freight transportation.

It has also developed the most comprehensive on-demand business model through its model “Uber for X”, starting with Uber for taxis.

It all started with “Ubercab” back in 2009. It’s first of a kind online ride-hailing service. In a short period, this phenomenon emerged like wildfire and a new economy named “On-Demand economy” was born.

Since then, Uber has been increasing almost every on-demand business one can fathom. And in 2019, Uber achieved a milestone of an estimated 110 million users with a mammoth 67% lion share for rise-sharing and 24% market share for on-demand food delivery business in the USA, solely.

The Year — Uber Sneaked Into Minds

In 2008, the idea of Uber whimpered in the curious heads of Travis Kalanick and Garret Camp when they were stranded on a snowy evening in Paris without being able to hail a cab. Then, a thought of booking a ride with a touch on the button strikes their mind.

Eventually, this idea changed lives, and they came up with a view of Ubercab in 2009.

Garett created the initial prototype, and some of his pals and Kalanick acted as the mega advisor to the brand, but officially, the app was released in San Francisco in 2011. Earlier, the services offered only a black luxury car for the user whose price was 1.5 times more than the regular taxi. Soon, the name changed from Uber Cab to Uber after complaints from Taxi operators of San Francisco.

Initially, you will be amazed to know the development of app consisted of building a think tank which included a nuclear physicist, a computational neuroscientist, and a machinery expert that worked as a foreseer for private hire car drivers and shared where the demand was the highest.

What Does Uber Have For You?

The biggest reason behind the success of Uber is what services they offered were unique to the transportation industry. But, it merely matters what industry is Uber in if the services are client-oriented they are all decked up to achieve new heights.

Some unique features Uber offers to the drivers as well as riders are as below:

  • The user can easily book a can with just a touch on the app.
  • The driver has the choice of accepting or rejecting the ride.
  • Once, driver accepts the ride, driver information is sent to the rider.
  • Riders have the accessibility to track down the ride nearby or in a particular location.
  • In some regions like India, Cash Payment is also available.
  • The payment can be made before or after the ride.
  • Rating, review and complaints options are all available in the app.
  • The drivers and riders can cancel the ride at any point of time.

The Big Appetite Of Uber — Revenue Model

Uber has two distinctive ways to earn mammoth revenue:

  • Uber charges a definite proportion of commission from drivers
  • Uber promotes marketing campaigns with other businesses.

Let’s uncover to pay attention to details:

It’s always been strife of words for an app development company to define whether a service was demanded first or offered first. In simple terms, people cannot decide whether the demand for service was an outcome or the supply of a specific service created its market.

For Uber, it was a clear picture. The Uber business strategy paid attention to keeping the supply chain fully ready when demand hits. Many startups have already opted for this strategy for their business following Uber’s footstep. When Uber enters a city, it clutches a fleet of drivers on a contractual basis so that when the demand for riders flows in, they are ready to go!

In short, Uber business plan revolves around its clients. The priority is to give riders an unforgettable experience, polite drivers, hassle-free ride, and booking comfort from anywhere. And, to do so, Uber has to hire professional drivers. Since the Uber business model has light inventory and runs on a commission basis, the only way to pace up with rising demand is to fulfil the need.

Usually, the cash collected by each journey in a ride in the only source of revenue for a cab firm, but Uber’s revenue model is a little different as its based on several factors. It reaps money through the rider trip commission, but also takes around 205 of the fare charged to the customer, and the rest 80% is for the driver.

In some scenarios, the company charges 1.5 to 3 times more based on the demand of the passengers. The trip fare is a combo of travel time, waiting time, and the distance cost.

Moreover, it also makes revenue from the cancellation of rides by the passenger, which is collected in their next rise and by advertising other products on the remnant space on their app.

In a nutshell, Uber has offered multitudinous cab models for their cab services. Also, their pricing algorithm depends on the variation of cab fares. Especially, when the demand increases per mile prices, the fare automatically increases leading to a great increase in the revenue.

How Many Features Do You Really Need For An Outstanding App?

If you are striving hard to craft your taxi-booking app, there is an utter need for two apps.

  1. The original platform consists of the driver app for driver-partners with respective firms.
  2. The rider app for the everyday riders to book the rides.

Apart from these, your partner app development company accomplishes an admin panel holding the potential to manage and monitor the platform’s work.

So, before you step towards your final destination of partnering with the ideal resources and professionals, it’s crucial to have a look at the basic and advanced features you want to integrate into your app for the riders.

The Basic Features To Create An App Like Uber For Clients:

  • Digital payment gateways integration
  • Geolocation and route tracking.
  • Easy registration and personal data management.
  • Push notifications of the booking and promotional codes.
  • Fair and square cost estimation of the ride.
  • Seamless communication with partner drivers straightway from the app.
  • Impeccable User Interface and User Experience

Now, The Advanced Features:

  • Easy option to book the ride for others.
  • Scheduled booking for a future ride.
  • Hassle-free splitting of fare with fellow chum.

While presently, it is the time to consider these basic and advanced features in the app for driver-partners.

Let’s have a look!

The Basic Features To Build Uber App For Partner Drivers:

  • Advanced route optimization.
  • Driver character and driving reports.
  • ‘Active/Inactive’ options showing driver’s visibility on the map, and inactive are not shown.
  • Contact to the passenger within the app.
  • Providing monthly, weekly and daily reports of past booking and earnings with feedback.

The Advanced Features:

  • Free cancellation with a specified reason within a set period.
  • App integrated with heat maps.

Now, the most critical “ADMIN PANEL”, usually placed at the last but it’s not the least thing to pay attention to. As you would be familiar, admin panels are conventionally web-based and require specific efforts on the part of your development partner.

It offers you a convenient outlook on business processes and gives capabilities to handle payrolls and gather user data.

If you are still a fence sitter in defining how much it costs to create an app in your region, Here’s The Answer!

It depends on the mobile app development company in Dubai, UAE and across costing factors. Also, according to Statista, the mean cost varies greatly because of the location:

  • India — $10–80 per hour
  • UAE — $ 50–150/hr
  • North America — $60–250 per hour
  • United Kingdom — $60–150 per hour
  • Western Europe — $40–120 per hour
  • Eastern Europe — $20–100 per hour

Probably, now you have a clear understanding of why India and Dubai is an ideal choice to hire the best app developers for your Next Big Thing.

Finally, A 360 Degree Outlook To Create A Taxi Booking App Like Uber

#Step1: Find Your Nook

Inching aside from a unique value proposition can be daunting. But, finding a nook in the taxi booking aisle with low competition is crucial.

#Step2: Manage Research and Technical Audit

Collect all the required data and information for developing a taxi-booking app along with advancements that can be made easily.

#Step3: Sketch A Taxi Booking App Documentation

Developing elaborated technical specification of product functionality, the technology stack to be used with sketching product functionality.

Now, as you have jotted down every small and significant part of the project, it’s high time to step ahead, get your free project estimation and discuss your project with technology wizards.

Keep in mind implementing each task based on the priorities and assigning unit testing to locate and fix bugs for analytical testing.

#Step5: All Set To Release Your Taxi-Booking App

The app developers of your app launch the app in the respective stores to make sure it runs seamlessly and accurately on every device.

The Final Call — “Staying Nimble Is Key”

Undeniably, on-demand taxi service is about making your customers contended.

There is still a void for innovators with a competitive trajectory inclined for Uber in the taxi-booking app market.

Therefore, partnering with Xicom proffers you with the perfect blend of resources, technology stack, and professionals for the best development experience. The professionals at Xicom are ready to walk the extra mile through gratifying their clients with a groundbreaking app having a unique value proposition.

Lastly, don’t be a part of the crowd with conventions. Indeed, discuss your project with experts to create a taxi-booking app that meets your all industry yet unique needs and scales your business to new heights in 2021.

So, to be a little distinctive from “Uberisation”, it’s high time to be inventive in the taxi-booking app aisle while saving on your efforts and time.

Be Inventive Now!

Originally published at https://www.xicom.ae on January 6, 2021.

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Lori Caricofe

Software tester by profession. Fast learner, Passionate about tech. Good sense of humour, & Enjoy challenges!