how to make ride hailing platforms driver friendly
Introduction
Ride hailing platforms are platforms where a user can hire a personal driver to get to a destination. The creation of ride hailing economy most popularized by Uber has led to several players in the space like Lyft, Careem, Bolt, Grab and many others. According to Statistia “ In the Ride-hailing market, the number of users is expected to amount to 1.97bn users by 2028.” (Statistia, 2024)
One crucial proponent of the ride hailing platform is the drivers. In this piece, I will be talking about how to make ride hailing platforms driver friendly, business tradeoffs and highlight players that are innovating in the ride hailing space for drivers.
Problems
As a frequent user of ride hailing services, one question I love asking drivers is why they choose to drive? Several reasons include flexibility of choosing their own hours, getting to meet interesting people and generating their own income.
However, many of the drivers I have spoken to (I used Uber & Lyft) have raised similar issues that include:
- Slow customer support — If there is a technical error or an issue that cannot be resolved on the app; a slow customer support delays the fixing of the problem, especially urgent requests.
- An unfair rating system that is skewed towards the customer in which if ratings change for the driver could lead to consequences for example; Uber can ban drivers temporarily or on a more permanent basis if their ratings are bad.
- Algorithms were opaque — it was frustrating as drivers felt a lack of control over their incoming due to opaque algorithms.
- False promises of high income — Many drivers are misinformed on income expectations, grossly overestimating the income they would generate like one driver told researchers in study conducted by Onde “ “I just want to get what they promised, which is about 1000 euros per week.”(Gorbach, Onde)
Re-thinking driver-centric solutions for ride hailing
Many platforms are paving the way with innovative solutions that put the drivers first like:
Fairer commission structures: Fixed or tiered commissions, along with bonus programs and incentives, offer drivers greater transparency and potential for higher earnings.
One company that offers which is a leading example of transparency in ride hailing for both customers and drivers is inDrive. They allow the customer to make an initial offer for a route and the driver can choose to accept it or offer their own price as shown in the image below:
Derived from InDrive website
Or Bluesmart in India that Implemented a “minimum guaranteed income” program during lean periods to ensure driver stability working out to 70% variable pay and 30% minimum guarantee. (Kashyaap, 2022)
Empowering pricing: Platforms like Didi in Australia lead the industry in pricing, where drivers take home 85% of the income generated. (15% service fee compared to Uber 18% service fee in Kenya.)
Derived from Didi Australia blog
Prioritizing driver safety: Features like in-app emergency buttons, panic alerts, and driver community support create a safer working environment.
Bolt has invested in driver training programs on defensive driving and passenger safety protocols. Bolt Kenya has features like Driving time limits ensuring drivers are fresh and alert as well an in-app emergency Assist button where driivers can quickly and discreetly alert the emergency services. (Bolt KE, n.d)
Derived from the driver page on Bolt Kenya
Building driver communities: Driver engagement programs, rewards for referrals, and access to training and resources foster a sense of belonging and value.
Back in 2016, Lyft introduced a Driver Adivisory Prograame — ensuring that drivers have a collective voice for feedback leading to future product iimplementations and members of this programme have hosted meetups for drivers gathering best practices and ideas, and organizing initiatives that give back to their communities and they test new versions of the app before its released to the general public.
Trade offs for Businesses
However, prioritizing drivers can have trade-offs for businesses. While lower commissions may attract and retain drivers, they can also impact platform profitability. The key lies in finding the sweet spot:
- Focus on efficiency: Optimizing ride allocation and reducing dead miles (where the driver drives around without a passenger or driving to pick up a passenger)t can benefit both drivers and the platform thus increasing overall ride volume.
- Targeted incentives: Offering bonuses for peak hours or specific routes can incentivize drivers during critical times while keeping costs under control.
- Diversifying revenue streams: Exploring additional services like food delivery or carpooling can generate additional income without over-reliance on passenger fares. — Little App is a great example of a Pan African super-app as they not only offer ride hailing services, but ticket management services, on-demand delivery services, corporate services and so on.
Sources
Ride-hailing — worldwide: Statista market forecast. Statista. (n.d.). https://es.statista.com/outlook/mmo/shared-mobility/gemeinsame-fahrten/ridehailing-taxi/weltweit?currency=usd
Bolt (n.d.). [Bolt website]. Retrieved from https://bolt.eu
Gorbatch, A. (n.d.). Understanding ride-hailing drivers’ behaviors and preferences. Onde App. https://onde.app/blog/understanding-the-drivers-likes-dislikes-behavior-and-preferences
Kashyaap, S. (2022, November 17). With its fleet of evs, can BluSmart solve commuting woes?. YourStory.com. https://yourstory.com/2022/11/blusmart-electric-vehicles-ride-hailing-startup
More for drivers. more for riders. 15% service fees.: Didi australia. More for Drivers. More for Riders. 15% Service Fees. | DiDi Australia. (n.d.). https://web.didiglobal.com/au/blog/making-rideshare-more-affordable/#:~:text=15%25%20Service%20Fees.
What is Lyft Driver Advisory Council. What is Lyft Driver Advisory Council — The Lyft Driver Blog. (n.d.). https://www.lyft.com/hub/posts/lyft-driver-advisory-council-dac-explained
inDrive (n.d) [Indrive Driver Webspage) indrive.com
