Ride-hailing vs ride-sharing – what's the difference?

Ride-hailing vs ride-sharing – what's the difference?

It's easy to get lost in today's mobility landscape. It feels like every year a new type of vehicle hits the streets, and with it comes some weird new term or category adding to an already deeply confounding list – ride-hailing, ride-sharing, carpooling, car-sharing, on-demand rentals, micro-mobility rentals, shared transportation, Mobility-as-a-service,...

No wonder people prefer using and verbing brand names, e.g. “Uber to the airport” or “grab a Bolt”. 

In reality, it's not that complicated. Virtually all of the terms listed above are self-explanatory and by the end of this article you'll have a firm grasp on the industry's terminology. 

Understanding the distinction between these various concepts is important for entrepreneurs and anyone else looking to set foot in the industry, as using the correct terms:

  • Ensures everyone is on the same page, 
  • Is relevant for regulatory compliance,
  • Matters in all your business endeavors from market research to strategy development. 

Since the two terms that people get most hung up on are “ride-hailing” and “ride-sharing”, we'll take a closer look at those, and then follow it up with a disambiguation of the other terms on our list. 

What is ride-hailing?

Ride-hailing is – surprise, surprise – the hailing of a ride. Much like with a taxi, it involves hiring a person with a car to pick you up and take you to your destination. 

So why don't we just call it a taxi service? 

When mobility startups like Uber came to prominence in the early 2010s, they did so by disrupting the cab industry through digitalizing the hailing experience and introducing transparent pricing. 

Read more: Uber's company history.

In other words, you could now hail a ride through an app on your smartphone and see exactly how much it would cost. Whereas previously, you had to call a taxi service or try to hail one on the street. 

So the term “ride-hailing” was coined to distinguish this new type of on-demand app-based taxi service from the more traditional one. However, over the years, the ride-hailing service portfolio has evolved beyond just taxi-like operations and includes things like hiring drivers for moving, or even taking your kids to school. Traditional taxi companies also increasingly make use of a ride-hailing app

Accordingly, the meaning of ride-hailing is the hailing of on-demand transportation services via an app. Most often it's used in the context of taxi-like services, but it's an umbrella term that can include other services, too. 

Fun fact: did you know that Uber was originally named UberCab? Its founders dropped the “Cab” part since they didn't see themselves as a traditional cab service.

What is ride-sharing?

Again – the hint is in the name. At the most basic level, ride-sharing is sharing a ride. But, as with ride-hailing, there's some nuance that's important to understand. 

Today, ride-sharing typically refers to multiple passengers sharing a single private ride on a route that passes their various destinations. You can think about it as on-demand carpooling. 

Let's unpack this. 

Though there are many similarities between ride-sharing and carpooling, they generally differ in terms of ride organization and journeys. Carpooling often happens informally, in the sense that a group of neighbors or coworkers traveling or commuting on the same route will agree to share a ride to, for example, save on gas. Carpooling can also be very sporadic and is primarily organized through private channels or local bulletin boards. 

On the flipside, ride-sharing allows a person to carpool with others by simply finding an available seat through an app – drivers digitally share their route and seat availability and passengers can hop into a suitable ride for a small fee. 

Notably, ride-sharing is often most popular with busy routes and times of day, as that's when there's highest demand. 

There's a reason why a lot of confusion arose regarding the difference between ride-hailing and ride-sharing, namely, the terms were used interchangeably early on. To this day, “Ride-sharing” is sometimes used as an umbrella term for all app-based mobility solutions, though this is going out of fashion, given the clearer differentiation between solutions. 

So, while both ride-hailing and ride-sharing are app-based on-demand mobility solutions for getting to a destination in a private vehicle, they differ in passenger count, cost, route, availability, and popularity. 

One key component further distinguishing ride-hailing from ride-sharing is the use of advanced software, designed to optimize operations and enhance user experience. Ride-hailing software supports companies in efficiently managing bookings, payments, and communication between passengers and drivers. To explore how this software can improve the efficiency and effectiveness of ride-hailing services, visit our detailed ride-hailing software use cases page.

Other terms commonly used in the mobility industry

Though ride-hailing and ride-sharing are categories you'll hear most often, it's almost inevitable that you'll encounter other terms, which may sow further confusion. 

Let's avoid that – here are some quick explanations of other popular terms.

Car-sharing

Car-sharing or vehicle-sharing is most often confused with ride-sharing, but despite sounding similar, they mean completely different things. Car-sharing refers to the app-based short-term rental of cars. The easiest way to remember it is that with ride-sharing people share a single ride, whereas with car sharing people share a single car – again, it's all in the name. 

On-demand rentals

On-demand rentals is a category describing vehicles that are instantly available for rent, usually through an app. This includes both micro mobility solutions, like scooters and bikes, as well as larger vehicles like mopeds and cars. For those following along – yes, car-sharing is a type of on-demand rental! 

Shared transport

As mentioned in the previous sections, “ride-sharing” is often incorrectly used as an umbrella term for all on-demand app-based mobility solutions. The correct term is shared transport or shared mobility. Shared transport is a broad category that includes both multiple people sharing a vehicle simultaneously (i.e. ride-sharing), as well as individual people sharing a vehicle over time (i.e. car-sharing/on-demand rentals). 

Ride-hailing and other on-demand services related to mobility are also often categorized under the shared mobility umbrella. 

Mobility-as-a-Service

Mobility-as-a-Service or MaaS is an approach to urban transportation that seeks to integrate a variety of mobility options (both public and private) into a single super-solution that answers a traveler's every mobility need. Often, MaaS solutions are sought out by local municipalities to provide effective alternatives to car use and minimize a city's carbon footprint. 

Is the terminology really that important? 

As you can see, a lot of the confusing mobility terms are simply categories and categories of categories – don't worry if you can't remember them all. If you know the difference between ride-sharing and ride-hailing that's already plenty. 

Anyone in the mobility industry will tell you that it's perfectly acceptable to ask for clarification when talking specifics, as it's common for people to interpret these terms differently, and language barriers can be particularly troublesome for getting on the same page. 

That said, you SHOULD pay close attention to the terminology if you're doing research for your own mobility business. A ride-hailing business is completely different from a ride-sharing one, and it's important not to compare apples to oranges during market research, as it can undermine your business from day one. 

Other than that, all you have to remember is that ride-hailing is hailing a ride and ride-sharing is sharing a ride. Simple as that.

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White label vs franchising: Which model is right for your mobility business?
White label vs franchising: Which model is right for your mobility business?

🛵 Thinking about launching a mobility business? One key decision can shape your entire growth path: go with a franchise or build your own brand with a white label solution. 🔍 This guide breaks down the pros and cons of each model – and shows how you can even grow your own partner network under your brand with ATOM Mobility’s white label platform.

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White label vs franchising: Which model is right for your mobility business?

Starting a new mobility business comes with many decisions, but one of the most important is choosing the right model for growth. Whether you're thinking about launching an electric scooter fleet, a ride-hailing app, or car sharing in your city, there are two main paths to consider: joining a franchise or building your own brand using a white label solution.

Both models offer clear benefits – and both have downsides. What works best depends on your goals, experience, and long-term vision.

What is franchising in mobility?

Franchising means joining an existing brand and operating under their name, systems, and technology. For example, a local taxi fleet might become a Bolt ride-hailing partner, gaining access to Bolt's technology, user base, and reputation. Similarly, in the micromobility space, some brands allow local entrepreneurs to launch electric scooter or bike-sharing services as franchisees.

This model is popular because it can significantly reduce the time and effort needed to launch. Instead of developing your own technology, brand, marketing strategy, and operational systems, you get a package, a “ready to use” business, from a brand that already knows the ropes.

Franchising: Pros and cons

The main advantage of franchising is speed and simplicity. You don’t need to build everything from scratch. You operate under a recognized name, which can make marketing easier. Often, you also get operational support and a clear playbook to follow.

But there are also downsides. As a franchisee, you don’t fully control the brand, customers and the technology. You may have limited flexibility to experiment or adapt the service to your local needs. Franchise fees or revenue sharing models can also reduce your profit margin. And if the brand suffers reputational issues elsewhere, it can impact your local business – even if you’re doing everything right.

What is white label in mobility?

A white label solution allows you to launch your own mobility platform – under your own brand – using someone else's ready-made technology. This means you can create a ride-hailing app, car-sharing service, or scooter fleet that looks and feels 100% yours, but without needing to build the software from scratch.

If you’re not familiar with how white label works, here’s a good explanation.

With white label, you take ownership of your brand and operations, while leveraging reliable, tested software that’s been used in dozens of markets. You’re not just a local operator – you’re the brand owner.

White label: Pros and cons

The biggest benefit of a white label approach is independence. You control the brand, the marketing, pricing, partnerships, everything. You can build a unique business that reflects your vision and local market needs. There’s no revenue sharing or ongoing franchise fees.

However, white label also means more responsibility. You have to manage marketing, customer support, local partnerships, and operations yourself. While the software is provided, the business is yours to run. It requires more involvement but also brings more potential reward.

3 reasons to choose your own white label platform

  • Complete control over everything: Unlike a franchise, where key decisions are made by its owner, you’re in charge of everything - from choosing the name, branding to allocating budgets and setting up a supply chain.
  • Flexible operations: There’s no universal solution that works equally well for all entrepreneurs. By starting your own project, you can better adapt to the local market needs, customer requests, and even changes in legislation. To launch a new app feature or adjust pricing, you won’t have to go through layers of approvals - you are the only decision-maker.
  • Faster growth opportunities: For example, by attracting investments, launching crowdfunding, increasing your fleet, making additional investments in advertising, or even launching your own franchise.

Choosing the right model for your mobility business

If you want a fast, low-risk way to enter the market with support and clear systems, franchising may be a good fit – especially if you’re new to mobility or want to test the waters.

If you want to build a long-term business under your own brand, with full control and higher potential margins, white label is likely the better option. It gives you room to grow and adapt without being tied to someone else’s rules.

Many successful businesses start with white label software to speed up their launch, then focus on building a strong local brand and user base. Over time, this approach can offer more strategic freedom and better returns.

You can even build your own franchise using ATOM white label

One advantage of choosing a white label provider like ATOM Mobility is that you’re not just building for yourself. With ATOM’s platform, you can also expand by inviting partners to operate under your brand in other cities or regions.

This means that you can launch as an independent operator and, over time, create your own franchise-style network. ATOM’s software allows you to add partners to your platform, assign them specific territories, limit access to data, and manage operations from one central system. Your partners operate under your brand – and you stay in control of the bigger picture.

This is exactly how several of our clients have grown. They started locally, proved the model, then expanded by partnering with others – all without giving up their brand or independence.

Both franchising and white label are valid ways to launch a mobility business, and both come with clear advantages. But if your goal is long-term brand ownership, flexibility, and the ability to scale on your own terms, white label is often the smarter path.

With ATOM Mobility’s platform, you can launch fast, operate efficiently, and even build your own network of partners under your brand – creating a franchise model that works for you.

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Launching a ride-hailing business from 0 in 90 days
Launching a ride-hailing business from 0 in 90 days

🚕 Thinking of launching your own ride-hailing service? You don’t need a giant budget or years of development. With the right tools and a local-first mindset, you can go from zero to launch in just 90 days. From platform setup and driver onboarding to beta testing and your first 1,000 rides - this guide covers it all.

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Starting a ride-hailing or shared mobility venture can seem overwhelming, but with a clear plan, it's possible to launch in just 90 days. This guide outlines a three-phase process: laying the foundation, building your product and team, and launching - plus tips for growth beyond day 90. By following this roadmap, you’ll validate your idea, ensure legal compliance, create your brand and technology, recruit drivers, and hit the market ready.

Day 0–30: Foundation

Finding a niche

Start with market validation and legal setup. Research your target area to identify unmet transport needs. Maybe large providers don’t serve certain areas, or there’s demand for eco-friendly, or premium segment or niche services like women-only rides. 

Looking to stand out in the competitive ride-hail market? Check out these two insightful reads:

- Finding a niche in the competitive ride-hail market: https://www.atommobility.com/blog/how-to-find-your-niche-in-the-competitive-ride-hail-market-real-world-examples-of-businesses-that-resonate

- Discover how a local taxi union in Sweden supports a new platform to reshape industry standards and build a fairer ecosystem: https://www.atommobility.com/blog/driving-change-with-fair-how-a-small-platform-is-redefining-the-taxi-industry-in-sweden

This should help you define your niche, unique positioning or angle, and ultimately your unique selling proposition to stand out from other players in the market.

Legal compliance

Next step will be forming your business (e.g., LLC) to protect liability and later attract investors. Apply for the necessary permits, such as TNC licenses, and consult local regulations. Insurance is essential – you’ll need commercial liability coverage that also includes drivers. Run background checks to ensure safety and compliance.

Legal compliance checklist:

  • Business registration
  • Ride-hailing or taxi permits
  • Driver background checks
  • Commercial insurance
  • Local regulation compliance (e.g., vehicle checks)

Budgeting for MVP launch

Outline core costs: software, licenses, insurance, marketing, driver incentives, customer support, accounting services, and some reserve. Use a white-label software like ATOM Mobility to avoid costly custom builds. These platforms offer rider/driver apps and backend systems for a fraction of development costs.

Plan an initial marketing budget (e.g., €1,000–€5,000) and allocate driver sign-up bonuses (€100 for 20 rides, for example). Include small expenses like Apple developer accounts or a place in co-working to work from. Keep costs lean and prepare a detailed budget for the first 6-12 months.

Financing: Bootstrapping vs. investors

Once you have a 6-12 month budget prepared, you can choose between personal funding, angel investors, or crowdfunding. Bootstrapping (using your personal capital) offers control but limits scale. Local group of angel investors can contribute €50k–€500k in total and extra mentorship. Crowdfunding helps raise funds while building a local supporter base. For example, you can engage drivers to invest via crowdfunding in exchange for a small equity share in your company and free usage of the platform for a certain period.

Here’s a helpful resource on using crowdfunding to kickstart your venture and get inspired: https://www.atommobility.com/blog/crowdfunding-for-your-vehicle-sharing-business

If your budget analysis shows you need external funding, try at least to launch a small-scale, working prototype with personal funds or an FFF (friends, family, and fools funding) round before entering the investment process. Demonstrating even modest traction significantly boosts your chances of a successful raise.

Please note that securing your first round of funding - whether from crowdfunding or business angels - typically takes six or more months. To keep momentum going, launch an initial version of your product or service, then start the fundraising process.

Day 30–60: Build & integrate

Software

Choosing the right software partner can make or break your new ride-hail venture. From cost efficiency and faster time-to-market to reliability and specialized industry knowledge, the benefits of a white-label solution often outweigh the complexities and expense of building from scratch. Be sure to evaluate each provider’s platform features - rider and driver apps, dispatch system, and payment tools—alongside their proven track record of scaling and entering different markets. Confirm their customization capabilities, pricing transparency, and ability to expand into new service zones as your business grows. Ultimately, opt for a partner that delivers both the technology and the strategic support you need. For more insights on this decision-making process, explore white-label solutions vs. building from scratch and discover Why ATOM for a deeper dive into selecting the right tech partner.

Create a clear branding identity

Start by selecting a memorable name that reflects both your niche and city - AI-powered tools like ChatGPT can speed up brainstorming. Next, design a simple logo and choose core colors using user-friendly platforms such as Canva or Looka. Consistency is key, so use these design elements across your website and social channels.

When it’s time to launch your online presence, opt for no-code platforms like Squarespace, or Carrd to create a minimal landing page in minutes -no developers needed. Clearly present your core message (e.g., “Premium, all-black Mercedes rides in [City].”), include links to your rider/driver apps, and offer driver sign-up form. This straightforward approach helps potential users and drivers quickly understand and trust your brand.

Driver onboarding (first 50 drivers)

Your service can’t run without drivers, so make their onboarding experience as smooth and appealing as possible. Start by defining tangible benefits - like 0% commissions for the first three months, niche perks, or local partnerships—that set you apart. Reach out via social media, online communities, and direct messaging to recruit your initial loyal driver base. Host webinars or info sessions to keep them engaged and address any concerns.

Keep in mind, your first drivers are crucial for user satisfaction: they are the face of your service and heavily influence each ride’s quality. Consider providing branded merchandise and clear guidelines—such as offering free candies or bottled water, opening doors, or any other gesture aligned with your unique selling proposition (USP).

To streamline onboarding, create a simple website form for sign-ups, ensure fast document verification, run background checks, and offer concise training modules. Incentives like sign-up bonuses or a zero-commission period can help you recruit your first group of drivers quickly. You might also guarantee initial earnings (covering fixed fees from your budget) to build driver trust while you grow your user base.

Goal: By day 60, aim to have at least 50 drivers signed up and ready to serve your launch zone, setting a solid foundation for your platform’s success.

Day 60–90: Test & launch

Closed beta testing

Before a full launch, invite a small group of friends, family, or early supporters to test your app and simulate real-world scenarios. Focus on the essentials: ride requests, payment processing, GPS accuracy, and cancellation flows -ideally at various times of day and on different devices. Take a few actual rides with real drivers to see how they follow outlined procedures and interact with riders. Gather feedback to uncover any usability issues or unexpected driver behaviors.

During this phase, refine your internal processes as well. Decide how you’ll handle customer inquiries - whether via a dedicated help email, chat support, or both - and respond promptly to build trust. If you have a team, ensure everyone is on the same page about responsibilities, communication guidelines, and how to address rider or driver concerns. This targeted approach helps you iron out potential issues, polish the user experience, and establish robust support protocols before going public.

Public launch

Decide whether to roll out quietly (a soft launch) to iron out any last-minute bugs or make a big announcement with a press release. If you choose the latter, pitch your story to local media outlets, emphasizing your community-first approach to mobility. Launch promotions - like 50% off first rides or a €5 sign-up credit - are a great way to attract early adopters and generate buzz.

Make sure your driver pool is ready to handle demand by coordinating schedules and availability. Consider offline tactics, too: distributing flyers in high-traffic areas, setting up campus booths, or sponsoring community events can help you gain local exposure. Once you’re live, keep a close eye on rider feedback (e.g., ride ratings, app store reviews) and address issues swiftly to maintain a positive user experience.

Marketing & growth to 1,000 rides

Partner with local influencers to promote your app, offering free rides or small payments in exchange for authentic social media posts. Focus on influencers your target audience trusts. Implement app referral programs - reward users and their friends with ride credits to spark word-of-mouth growth.

Keep engagement high by sharing milestones and user success stories online. Show up at local events, offering exclusive promo codes to attract new riders. Begin with small-scale digital advertising, reinvesting as you generate revenue and learn which channels work best. Track core metrics like sign-ups, ride volume, and wait times so you can make data-driven decisions and refine your strategy in real time.

Post 90 days: Scaling

Customer support & operations
As your platform grows, consider outsourcing or automating aspects of customer support. Create a help center or FAQ to guide users to quick solutions, and keep daily operations under close watch so you can resolve any issues swiftly. To remain efficient, hire part-time help (e.g., marketers or fleet managers) who can handle specialized tasks without inflating your overhead.

Fundraising
With initial traction in place, you’re in a strong position to secure additional funding. Present clear data on ride volume, user retention, and revenue growth to potential angel investors or crowdfunding platforms. Government grants may also be available for sustainable transport initiatives, so explore those opportunities. Be specific about how the funds will be used - for instance, "We need €100 000 to expand into two new cities and reach 10,000 rides per month."

The 90-day timeline
Although launching a ride-hail platform in 90 days is ambitious, a focused strategy and lean tooling can make it possible. Stay agile, keep service quality at the forefront, and set tangible milestones for each stage. With strong local insights and consistent execution, you can carve out a lasting presence in the mobility space.

Growth & expansion
Before moving into new cities, solidify your position in your initial market. Continue recruiting drivers and reaching fresh rider segments through targeted partnerships and loyalty programs. If you decide to scale further, use your 90-day playbook again—tweaking it for each new region’s unique challenges and opportunities. Good luck!

Launch your mobility platform in 20 days!

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