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Rideshare: Definition, How It Works & The Best Rideshare Companies

Last Updated: October 20, 2021

Uber and Lyft took the world by storm when they revolutionized the rideshare industry. But what is rideshare and how does it work?

Table of Contents

Chapter 1
What Is Rideshare?
Chapter 2
How Does Ridesharing Work?
screenshot of uber ratings screen on phone in hand
Chapter 3
How Much Does Ridesharing Cost?
Chapter 4
The Pros and Cons of Ridesharing
Chapter 5
List of Rideshare Companies
Chapter 6
List of Taxi Hailing Apps
Chapter 7
List of Carpooling Apps
Chapter 8
Frequently Asked Questions

Over the past 10 years, rideshare apps have taken the world by storm.

Public transportation can give you an option to get from place to place without owning a car.

But all across the globe, commuters have adopted a new and affordable way to get around their city.

Not all cities have public transportation systems, so rideshare fills the gap.

This service allows you to get from place to place without driving yourself or sharing space with a crowd.

By using apps to connect drivers with passengers, ridesharing has become a popular way to travel.

Whether you’re going to the airport, running an errand, or going out for the night, catching a ride can get you there.

Ridesharing services have given people an innovative alternative to standard taxi services.

You can reserve a ride, pay, and manage your trips all from your mobile device.

There are many different rideshare apps on the market.

You may not know where to start if you’re new to ridesharing or are interested in driving for a rideshare platform.

In this article, we’ll go over what rideshare apps are, how they work, and how much they’ll cost you.

We’ll also cover the most popular rideshare apps and show you how you can sign up and start your rideshare adventure.

Chapter 1

What Is Rideshare?

Learn the basics of ridesharing - what it is and how it works.

When discussing the concept of ridesharing, it's important to understand how it all started.

What are Rideshare Apps?

Ridesharing is a concept that was pioneered by Uber in 2009.

Uber provided customers with a way to easily reserve a ride on their mobile device.

Rideshare refers to a service that connects drivers with passengers that need transportation.

Rideshare apps let you easily reserve a ride in your city with little effort.

Passengers can catch rides without having to ask friends or find an available taxi.

Think of them as a convenient on-demand taxi service that requires only a few taps of your smartphone.

Instead of hiring their own taxi drivers, they gave gig workers an opportunity to make money by driving customers in their own vehicles.

Passengers use smartphone apps to book rides, get updates on the driver’s location, and pay.

Instead of calling a taxi company, the app uses your phone’s location to find the closest driver to pick you up.

You enter your current location and destination.

The driver will have all that information via the app.

The use of apps for ridesharing makes this process easy for both drivers and passengers.

Drivers can turn on their availability at any time and make money in addition to their regular job.

Why Is It Called Rideshare?

Rideshare refers to a service that connects drivers with passengers that need transportation.

It’s like a taxi service, except the drivers are freelance employees using their personal cars.

Passengers use smartphone apps to book rides, get updates on the driver’s location, and pay.

Instead of calling a taxi company, the app uses your phone’s location to find the closest driver to pick you up.

You enter your current location and destination.

The driver will have all that information via the app.

The use of apps for ridesharing makes this process easy for both drivers and passengers.

Drivers can turn on their availability at any time and make money in addition to their regular job.

Passengers can catch rides without having to ask friends or find an available taxi.

How Ridesharing Started

While Uber undoubtedly led the rideshare boom in recent years, rideshare services didn't actually begin with the now-international company.

Modern ridesharing — originally known as ride-matching — services already began flocking to the internet in the late 1990s, over 10 years before Uber was even founded.

Many of these early digital services functioned more like carpooling, simply helping drivers earn extra cash on their way home by finding a rider to cover part of the trip.

However, ridesharing has segmented into its own commercialized industry, with many full-time Uber drivers and Lyft drivers waiting for requests throughout the day.

This can, in part, be attributed to the massive popularity of Uber, after the company pivoted from being a smartphone-based black car service to offering its most popular service, UberX — the standard for what ridesharing is today.
For a quick overview of the dominant rise of Uber, check out the video summary below:

Uber proved to be a profitable and flexible career for many of the company's drivers, who function as independent contractors, and a convenient, affordable option for riders.

The rest is history.

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Chapter 2

How Does Ridesharing Work?

The basic principles of rideshare and how it works for passengers.

No that we have a better understanding of the concept behind ridesharing, let's take a deeper dive into how rideshare apps work.

Ridesharing is entirely app-based and the experience appears very seamless.

Each company has its own app that searches for available drivers when you open it.

While each app is different in it's own right, most rideshare apps follow the same formula:

You open the app, reserve a ride, and then hop in the vehicle once your driver has arrived.

Ride reservation, payment, and account management are all handled through your rideshare app.

Each rideshare app will have its own unique intricacies, but most will have similar functionalities.

Here’s how they work.

You can reserve your first ride after creating your rideshare account.

You’ll open the app, type in your destination, and see available vehicles in your area.

The app will show you how long it will take for your rideshare driver to arrive, how long your trip will take, and how much your trip will cost.

You then reserve your ride and wait until your driver arrives.

Upon arrival, you’ll hop in and head to your destination.

All drivers are given thorough background checks to ensure the safety and comfort of passengers.

After your trip, you can tip your driver through the app and rate your experience.

You never need to worry about paying your driver cash since all payment is handled through the app.

Types of Rideshare Options

There are three main types of rideshare apps — standard rideshare apps, taxi-hailing apps, and carpooling apps.

Standard rideshare apps are what most people think of.

You reserve a ride and an independent contractor will come to pick you up in their vehicle.

Uber and Lyft are great examples of rideshare apps that follow this formula.

Taxi-hailing apps are one step closer to your traditional taxi service.

These apps have adopted the rideshare model and applied it to the taxi business.

You’ll reserve your ride and a licensed taxi driver will pick you up in their cab. Curb and Arro are two taxi-hailing apps.

The last rideshare option you have is a carpooling app.

Carpooling apps let you team up with others in your area to share your ride.

You can either list your vehicle on the platform and allow others to drive with you, or you can reserve a ride in someone else’s car.

It’s a great way to split the expenses of fuel and reduce your carbon footprint.

Waze Carpool is one example of a carpooling app.

There are many options out there for you to choose from.

We’ve done the legwork and found the best ridesharing apps on the market.

What Is the Difference Between Rideshare and Carpooling?

Carpooling is a more casual relationship between drivers and passengers who know each other.

Commuters would carpool to work, split gas costs, alternate drivers, or give free rides.

Ridesharing is a service that you pay for.

You don’t know your driver beyond getting a name and picture when you book the ride.

The driver is taking you to a destination, but they aren’t necessarily going to the same place.

What Is the Difference Between Rideshare and a Taxi?

Rideshare drivers aren’t professionals like taxi drivers are.

They are everyday people who want to make money on the side and enjoy taking people from place to place.

Drivers don’t go through the background checks and training that cities mandate taxi drivers complete.

Still, each company will screen its drivers.

Some companies have high-end services that allow you to request screened drivers.

Uber Lux and Uber Taxi are examples of ridesharing apps that more thoroughly vet their drivers.

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Chapter 3

How Much Does Ridesharing Cost?

The typical costs and ride fares that you can expect as a rideshare rider.

screenshot of uber ratings screen on phone in hand

Ridesharing is an affordable alternative to taking a taxi or renting a car. Although, taking one will probably cost much less than you might expect.

The cost of your ride will depend on how far you’re traveling and how long it takes you to get there.

You may also be charged more for things like traveling during rush hour or limited driver availability.

Every rideshare app will have its own unique cost structure.

Some will have flat-rate pricing, while others will have dynamic pricing depending on factors like how far you’re driving.

The more popular cost structure for rideshare apps is dynamic pricing.

Your fare will follow a formula that typically has a base rate, distance traveled rate, and time in vehicle rate.

There may also be an additional charge that some companies refer to as surge pricing.

There may also be an additional charge that some companies refer to as surge pricing.

Surge pricing will multiply your fare depending on factors like traffic, time of day, events in your city, or driver availability.

Although less popular, some rideshare apps use flat-rate pricing.

This means you’ll pay a  set fee for your ride regardless of how long it takes you to get there.

You can use sites like Rideguru and Bellhop to estimate fares.

Which Rideshare Company Is Cheapest?

Every rideshare company strives to be affordable so the average person can benefit from the service.

Because Uber and Lyft are so widespread, they have competitive pricing.

You’ll have to check the apps to see which site offers the cheapest ride at a particular time.

Is There Anything Cheaper Than Uber?

Lyft is often cheaper than Uber.

Prices across apps fluctuate according to driver availability and passenger demand.

Peak times can also cause price surges.

But Lyft is Uber’s most competitive app in the United States.

What Rideshare Pays the Most?

Both Uber and Lyft operate using similar models that appeal to gig workers.

They allow drivers to be active on the app whenever they’re free to pick up passengers.

Drivers can select any riders available, regardless of the range.

The apps charge passengers according to a set base rate.

They add on fees for the total miles traveled, but those fees can vary according to the time of day.

If passengers request a specific vehicle, there’s an additional charge for that choice.

Passengers can add a tip after their rides, and both apps allow drivers to keep the entire bonus.

However, Lyft had a tip option from the beginning, while Uber didn’t add that perk until 2017.

As a result, Uber drivers did not receive a tip as frequently as Lyft drivers, which impacted their earnings.

Uber takes a 25% commission from the fares, which is higher than Lyft’s 20% commission.

The companies also get paid when the passenger books the fare.

This booking fee comes directly from the passenger and doesn’t factor into driver earnings.

Because the passenger is paying the booking fee, that amount might impact how much they tip.

So, in reality, any rideshare company will make more from each ride, even though the driver is doing the work.

What you earn from ridesharing depends on what you put into it.

If you’re available at peak times, you can make a lot more money than when you’re driving around with no passengers to pick up.

Overall, Lyft drivers make more money since the company takes less commission from each ride.

But before you try to calculate your earnings, you have to remember that you’ll be paying for gas, insurance, and vehicle maintenance.

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Chapter 4

The Pros and Cons of Ridesharing

Rideshare apps come with incredible convenience, but they also have hidden downsides.

Whether you drive yourself or ride as a passenger, there’s always a risk to being on the road.

The companies have safety features like those mentioned above, but ridesharing still has pros and cons.

Benefits of Rideshare

  • You don’t have to drive your own car when you’re going out.
  • You don’t have to contact a taxi company and wait for an available driver.
  • You can search several different apps at the same time to find the quickest ride.
  • You don’t have to pay the driver directly—it’s all through the app.
  • Ridesharing helps reduce car emissions.
  • Prices are cheaper than taxi companies and more comfortable than public transportation.

Downsides to Rideshare

  • You can get into the wrong vehicle if you don’t double-check your information beforehand.
  • Drivers risk picking up intoxicated customers who might make a mess in their vehicles.
  • Low-rated drivers and passengers get banned from the apps, but it often takes a while for this to happen, so it is possible for you to get a bad match.
  • Drivers are more at risk for car accidents since they are on the road for more extended periods while serving others.

Are Rideshares Safe?

With rideshare drivers making millions of trips every day, most of them happen without incident.

Still, rideshare companies have put policies in place to protect both the passengers and the drivers.

Uber released their safety report in 2019.

This report included data about assaults and fatalities that happened during paid rides.

The analysis showed them that they needed to put extra safety features on their app.

When Uber screens their fleet, they share the information with other rideshare companies.

Uber’s screening helps ensure protection for all passengers, regardless of which app they use.

Uber also added a verification system that allows passengers to double-check that they’re getting into the right car.

An option built into the app enables passengers to record the drive if they feel uncomfortable.

Both drivers and passengers can call for emergency services from the app.

Because the app shows the progress of your trip, you’ll be able to give the dispatchers your exact location.

Lyft has extensive safety features that start before a driver is authorized to work through the app.

The company checks each driver’s DMV records and searches county and federal court records for criminal offenses.

Passengers see their driver’s picture and license plate number when they book the ride, so they’ll know they’re getting in the right car.

Drivers can also see their passengers’ names and photos before they pick up the customer.

Both drivers and passengers rate each other and leave feedback, so there is an incentive for everyone involved to be kind and civil.

The company will review anyone who scores less than four stars.

There are ways to be safe when you’re ridesharing. Some safety tips include:

  • Verify your driver’s identity before getting in the car.
  • Let family and friends know you’re ridesharing, and tell the driver that others know where you are.
  • Always buckle your seatbelt.

Little-Discussed Topic: Rideshare Insurance

Many rideshare drivers aren’t aware that their standard insurance might not cover their car when driving for hire.

Rideshare companies insure their drivers, but those policies have limits.

Rideshare apps cover drivers when they are on their way to pick up a passenger and when the passenger is in the vehicle.

If they’re available, driving around, and waiting to find a customer, the company’s insurance won’t cover them.

Because you’re using the car for business at that time, it might also be tough to get your insurance to pay for the damage.

Getting rideshare insurance through your provider covers that gap.

For some companies, you only need to get a rideshare endorsement on top of your regular insurance.

Others require you to have separate rideshare insurance.

Either way, these policies ensure you won’t pay out of pocket.

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Chapter 5

List of Rideshare Companies

Who are the most popular rideshare companies globally?

The explosive growth of ridesharing around the world was unprecedented, but nowadays, many rideshare companies are household names.

The big four apps in the global industry are now worth over $166 billion alone. These four apps are as follows:

1. Uber

Uber is, of course, the world's biggest rideshare brand.

Though its well-known UberX service has pretty much defined what ridesharing is, the Uber services offered are a huge lineup of rideshare services that include:

Uber users can also use the ridesharing app to request package deliveries and helicopters in some cities.

One unique feature that Uber helped popularize was the ability to rate users.

Once your Uber ride is complete, riders can jump on their smartphone app to give drivers a star rating, and vice versa.

This helps keep all users on this peer-to-peer ridesharing network accountable.

Uber rates and fees vary widely depending on what ride type you request — Uber Express Pool being the cheapest and Uber Lux being the most expensive on-ground transportation option.

However, all services tend to be among the most affordable ride options of their kind (for example, Uber Black when compared to other black car services) in their respective markets.

All Uber rides are subject to surge pricing, which raises fares when demand is high to balance the amount of riders and drivers on the road.

2. DiDi

DiDi falls just behind Uber in terms of global market share.

Based in China, the company now operates in over 400 cities worldwide, with a presence in Australia, Japan, and parts of Latin America.

DiDi is almost exactly like Uber in every way, just available in different markets.

Like Uber, it not only offers a wide variety of rideshare services, but has also expanded into food delivery, bikesharing, and more.

Though DiDi actually bought out Uber's Chinese operations as it continued to expand, the two companies still have some shared markets.

Within these markets, DiDi tends to be about 10% cheaper than Uber.

3. Lyft

Lyft is a rideshare company that solely operates in the United States and Canada, but it's already the third largest rideshare company in the world.

There’s a good chance you’ll have access to a Lyft driver if you live near a busy urban area.

Lyft started as a fun alternative to Uber, outfitting their vehicles with large pink mustaches.

The mustaches went away, but Lyft is still going strong, providing customers with reliable transportation and great service.

Though the company has launched some bikeshare and scooter share programs recently, it remains the most heavily rideshare-focused brand of the top four.

Like DiDi, Lyft offers its own version of the majority of Uber's services.

For example:

  • Lyft: Standard Lyft rideshare service
  • Lyft XL: Standard service but with larger vehicles
  • Lyft Lux: Luxurious vehicles when you want to ride in style
  • Lux Black: All black luxurious vehicles for those special occasions
  • Lux Black XL: The same as Lux Black but in an SUV
  • Lyft Shared: Shared carpool option with other passengers

The Lyft app is very similar to the Uber app, and due to the intense competition between the two companies in North America, Uber and Lyft rates and fees are extremely close in every market they share.

Like Uber, the cost of your trip will vary depending on which vehicle you choose, how far you’re traveling, and how long it takes to get there.

4. Grab

The fourth biggest rideshare company in the world is Grab, a Singapore-based platform that leads the industry in Southeast Asia.

In addition to the ride types offered by the platforms above, Grab also offers unique regional services like smartphone-based tuk-tuk and remorque requests.

What makes the platform unique is that you can actually request food, groceries, car rentals, and more — all seamlessly on the same platform you're using to request a ride.

5. Wingz

Wingz is similar to other rideshare apps with a few different caveats.

Wingz functions a lot more like a standard rideshare service, but instead of focusing on on-demand rides, the company specializes in rides scheduled up to two months ahead.

For example, if you just got off a flight that was running a little behind, your driver will still be waiting for you without the risk of receiving any sort of late fee.

The rideshare platform matches you with a driver upon request, so you know there's someone who has you on schedule.

Plus, you can save drivers if you enjoyed their company or great service.

The next time you reserve a ride, you can look through your favorite drivers and choose who will pick you up.

Drivers will wait for your arrival, you can pick your favorite drivers, and you’ll never have to worry about surge pricing.

Though Wingz is best known for providing rides to and from airports, it also operates in many metro areas, helping you get reliable rides to meetings, events, and more.

Wingz requires a $25 minimum fare and requires airport fees, but you'll never have to deal with anything like Uber surge pricing, which can multiply fares without a limit when demand is high.

6. Safr

Safr focuses on the needs and safety of female riders.

The rideshare platform empowers women by giving them added safety and security features so they can ride with peace of mind.

It all starts with the drivers.

Safr drivers are carefully vetted and given comprehensive background checks.

They’re also paid higher than the industry average which encourages a higher level of service.

Before you reserve your vehicle, you can decide between a male and female driver — whichever makes you feel comfortable.

Safr is all about choice, and it starts with this step.

When your ride arrives, there are added security features to help you feel more comfortable.

Before hopping in, there is a color-matching feature that ensures you’re getting into the right car with the right driver.

There’s also an SOS button that connects you directly to 911 and automatically shares your location.

You can breathe easy knowing that if you’re ever put in an uncomfortable situation, help will immediately be on the way.

Plus, a part of every fare you pay goes directly to charities and organizations that help empower women and support children, animals, and local communities.

You can give back to your community by simply using the Safr rideshare service.

  • City Availability: Washington D.C., Boston, Orlando, Atlanta, Dallas, San Francisco, and Charlotte
  • Ride With Safr: Rider sign-up
  • Drive for Safr: Driver sign-up

7. HopSkipDrive

HopSkipDrive has one passenger on their mind — children.

The platform was built to provide a safe rideshare option to families who need help getting their kids home from school, soccer practice, or other extracurricular activities.

HopSkipDrive helps families and schools handle the complicated logistics of managing transportation for children, while ensuring parents are comfortable throughout the entire process.

The first thing on a parent’s mind is safety.

You wouldn’t want to let your child hop in the car with a stranger without feeling confident they’re safe.

HopSkipDrive alleviates these worries by making sure they do rigorous background checks, fingerprinting, and ongoing DMV checks.

Drivers are certified caregivers with at least five years of experience and undergo a 15-point certification process.

The app also allows parents to see where their children are at all times.

You can see when the driver is on their way and the exact moment your child enters the vehicle.

HopSkipDrive was designed to give parents peace of mind.

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Chapter 6

List of Taxi Hailing Apps

We'll introduce you to three popular platforms used by riders who prefer a taxi below.

Taxi-hailing apps connect you with taxi drivers in your city. Instead of calling a cab or sitting at the corner trying to hail one down, you can open your app and have a taxi on the way.

1. Curb

Curb takes a different approach to ridesharing.

The on-demand taxi-hailing platform serves as the reservation app between you and taxis in your city.

Curb partners with over 50,000 cabs and 100,000 taxi drivers across most major cities in the United States.

The app hires fully licensed professional taxi drivers instead of enlisting independent contractors to handle the driving.

Although you’re reserving a taxi, the service still works the same.

Open the app, reserve a ride, and your driver will be at your location shortly.

City Availability: Curb cities

Ride With Curb: Rider sign-up

Drive for Curb: Must be a licensed independent taxi driver or work for a professional taxi service

2. Arro

Similar to Curb, Arro focuses on being the middleman between you and taxis in your city.

It enables you to hail a taxi through the app or even pay for taxis you’re currently in.

The Arro service works the same as most rideshare apps.

You put in your destination, get picked up, and pay through the app. Sounds familiar, right?

Compared to Uber, you’re receiving pretty much the same service except you’re in a taxi and you don’t have to worry about surge pricing.

The part that makes Arro slightly different from others is being able to pay for a taxi that you didn’t reserve on the app.

For example, let’s say you hailed a taxi by waving your hand at the corner.

You hop in your ride and realize you don’t have any cash to pay for your trip.

You can open your app, select “I’m already in a taxi,” and enter the seven-digit taxi code.

Your fare will automatically be paid by your credit card on file once your trip is complete.

3. Flywheel

Flywheel is a smaller rideshare operation that utilizes local taxi drivers to get their customers from A to B.

You simply use the app to find the closest taxi driver, hop in, and pay through the app — no cash or credit card needed.

Flywheel plays up the fact that it uses only local taxi drivers who know the area better than anyone else.

This means shortcuts and short trip times because you’ll be driving with people who know the city like the back of their hand.

The downside is that it only has operations in four U.S. markets — San Francisco, Fort Lauderdale, Houston, and Washington, D.C.

If you’re not in one of these markets then you’ll have to choose another taxi or rideshare alternative.

  • City Availability: San Francisco, Fort Lauderdale, Houston, and Washington, D.C.
  • Ride With Flywheel: Rider sign-up
  • Drive for Flywheel: Driver sign-up

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Chapter 7

List of Carpooling Apps

When going in the same direction, check out these popular carpooling apps.

Carpooling apps connect you with other commuters who are traveling in the same vicinity.

Instead of driving by yourself, you can share a ride with others and save some money.

1. Via

Via is a ridesharing service that blends public transit and public car rides.

Like UberPool and Lyft Shared, this platform focuses on matching riders with drivers and fellow passengers who are headed on the same route.

It primarily focuses on carpooling reservations but also gives riders the option to book a private vehicle.

Via is also built to be cheap.

The shared service consists of setting your pick-up time and location, getting picked up, and then getting dropped off within a few blocks of your destination.

It may seem inconvenient not getting off directly at your end destination, however, this helps keep trip times down so Via can compete with taxi services and other rideshare platforms.

Because riders have to meet their drivers at a nearby corner for every pick-up — even for private rides — the platform is able to offer rides that start at just $3.95 in some markets.

Via rides remain incredibly efficient, too.

If you want to get dropped off at your exact destination, then you can opt to reserve a private ride.

This will give you your own vehicle but you’ll pay a premium for the convenience.

2. Waze Carpool

Waze started off as a cutting edge navigation app that let drivers report traffic conditions so you could know all the secret shortcuts and real-time traffic reports.

It was only natural that the company would evolve its business into the carpooling area.

Waze says its carpooling service is a fresh take on ridesharing and comes at a discounted price.

With Waze Carpool, you’re not getting picked up by a paid gig working driver.

Instead, you’re riding with other commuters like yourself who are going in the same direction.

You can choose to be the driver and welcome other passengers into your vehicle, or you can hop in someone else’s car to save some cash.

The carpooling model allows the driver and rider to share the costs of gas and tolls.

On top of that, you get to use the carpool lane and reduce your carbon footprint by taking more vehicles off the road.

3. Zimride

Zimride is a ridesharing network that lets you pair up with other drivers and carpool.

It enables you to post your planned ride, choose between prospective riders who requested a ride, and share the costs with others.

Zimride is operated by Enterprise, the car rental company, and primarily serves corporate employees and university members.

In order to use the service, your corporation or university must have an established network with Zimride.

After you determine if your corporation or university is part of the network, you can create an account and post your first ride request.

You can choose to either post your ride in your vehicle on the app or request to ride with others.

Once you vet the potential shared carpooler, you can meet up, share your ride, and reduce gas consumption and emissions.

It’s a win-win for both parties.

Chapter 8

Frequently Asked Questions

You’ve learned a lot about ridesharing and the various companies that provide the service. Still, you might have a few additional questions.

These are the most common questions that come up with rideshare users.

1. Are rideshare drivers covered by insurance?

Most of the world's largest rideshare apps provide ample liability insurance coverage when riders are in the vehicle.

All drivers are required to have personal car insurance policies, and many even purchase separate rideshare insurance policies to ensure they have full coverage whenever they're on the road.

Riders never have to worry about their drivers being uninsured in the event of an accident you're involved in.

2. How do I know my rideshare driver can be trusted?

Though not as heavily regulated as the taxi industry, ridesharing is far more regulated now than when the modern industry first blew up.

In New York, all rideshare drivers actually have to pass the same licensing requirements as a taxi driver.

In other cities, even if you're not riding with brands like Uber or Lyft with specific driver requirements, odds are, your state still probably requires your driver to pass a background check and have at least a year of driving experience.

Most major apps also allow for driver ratings, so you'll see if your driver is consistently getting low ratings.

Your rideshare driver is also required to submit documents like their driver's license, personal auto insurance policy, a passing vehicle inspection form, and more to verify their identity and confirm their vehicle is safe to drive.

3. Do I need to tip my rideshare driver?

Yes, much like you would tip your taxi driver and other service workers, you should tip your rideshare driver.

A tip of 15% or more is custom.

4. Are Rideshare Drivers Independent Contractors?

Yes, all rideshare drivers are independent contractors.

This status means that the respective rideshare companies have to approve each driver before they can start driving.

However, they do not receive a paycheck like regular employees.

Independent contractors don’t get an hourly rate; their income is entirely dependent on how many rides they give.

Independent contractors also don’t have taxes taken out of their payments from rideshare companies.

They have to file self-employment taxes.

If they don’t have health insurance through another job, they’ll have to find it through the marketplace.

The rideshare companies don’t offer health insurance.

While the ridesharing companies do offer car insurance, it’s limited.

The driver is only covered when picking up a passenger or taking them to their destination.

This coverage leaves a lot of gaps, so drivers are better protected if they provide their own rideshare insurance.

Independent contractors use their personal vehicles for work.

Using their own cars means they’ll also pay for gas and car maintenance.

These costs can add up, so it’s worth estimating expenses before taking on this side hustle.

5. Can Rideshare Drivers Carry Guns?

Uber and Lyft have banned both drivers and passengers from carrying firearms.

This rule is hard to enforce because the companies don’t do random checks of the vehicles.

However, either party can mention a weapon in their review and have the company look into it.

Written by Brett Helling

Brett Helling is the owner of He has been a rideshare driver since early 2012, having completed hundreds of trips for companies including Uber, Lyft, and Postmates. In 2014 he acquired to share his experiences with other drivers. His insights are regularly quoted by publications such as Forbes, Vice, CNBC, and more. He is currently working on a book about working in the Gig Economy, expanding his skill set beyond the rideshare niche. Read more about Brett here.

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