Ride-Hailing vs. Ride-Sharing: The Difference Explained


In your job as a planner, we know you're often fielding basic questions about public transit. We hope this Remix Primer blog series offers another resource as you educate your constituents.

With more people needing convenient transportation on demand, the services provided by rideshare companies are becoming increasingly popular and necessary. Using these services, commuters pay to get to their destinations in other drivers' personal vehicles, reducing or even eliminating their need for their own vehicles.

People who use these services often call them “ride-sharing” or “ride-hailing” services and tout that they limit the number of cars on the road, which helps lower air pollution and traffic congestion. But is this true?

Ride-sharing and ride-hailing actually describe two different experiences, each with a different impact on the environment and the economy. Let’s take a closer look at what each term means and what on-demand service we should invest in moving forward to offer the best public transportation.

What Is Ride-Sharing?

Ride-sharing is a way for multiple riders to get to where they’re going by sharing a single vehicle, like a car or van, that’s going in their direction. This vehicle makes multiple stops along a route to pick up and drop off passengers, reducing the need for multiple cars on the road.

Ride-sharing is a form of shared mobility, but it is not the same as car-sharing. People who car-share allow a single car to be used among multiple drivers, usually for a fee. Ride-sharing lets riders share a route and not a vehicle.

In many ways, ride-sharing is similar to carpooling. However, ride-sharing is a more on-demand transportation option and doesn’t need the type of prearranged agreement carpoolers have with each other. Unlike most forms of carpooling, people also pay a fee to ride-share, although it tends to be affordable.  

When people ride-share, they reduce the level of traffic congestion on the street. They also reduce the amount of carbon emissions produced by single-occupancy vehicles, save fuel, and lower the cost of travel. Those who participate in ride-sharing also enjoy some social benefits, since sharing a vehicle gives them the opportunity to talk to their driver and fellow passengers.  

Today's availability of smartphone apps makes it easy to participate in ride-sharing. Via, for instance, provides on-demand mobility solutions so its partners can offer shared ride service that pools riders heading in the same direction into the same car or van. Passengers can book rides on their phones and be matched with a rider using an efficient route. This makes travel easier and reduces individual carbon footprints.

What is Ride-Hailing?

Ride-hailing is when riders hire a personal driver to take them to a destination. In the past, this used to be a taxi service. Now, there are many more ride-hailing platforms available, such as Uber and Lyft, to hail a ride from practically anywhere.

Although this might seem similar to ride-sharing, many people who use ride-hailing services are not ride-sharing. The drivers hired are not going in the same direction as their passenger but regularly take multiple routes to fit their customers’ needs. Drivers also will not always pick up multiple passengers moving along the same route.

While it is true that some Uber and Lyft passengers can share rides with other riders (similar to how taxi passengers going in the same direction “split a fare”), most Uber and Lyft rides only involve a single driver and passenger, making them examples of ride-hailing and not ride-sharing.

Ride-Hailing vs. Ride-Sharing: The Key Difference and Why it Matters

Unlike ride-sharing, the vehicle used in ride-hailing is not shared among multiple riders for each trip. As a result, many of the benefits enjoyed by ride-sharing do not happen in ride-hailing, because the number of vehicles on the road doesn’t get reduced.

Simply sharing a vehicle with a driver does not reduce the amount of carbon emissions in the air or traffic congestion on the street. In fact, since vehicles used by a transportation network company like Lyft or Uber are constantly on the road taking passengers on multiple routes, they regularly contribute to the congestion and emissions associated with single-occupancy vehicles.  

The Challenge with the Rise of Ride-Hailing

A 2020 IBM survey of U.S. consumers indicates that more than 20% of the respondents who used to use buses, subways, trains, and other forms of public transportation stated they no longer would, due to cocnerns from the COVID-19 pandemic.

On the other hand, only 24% of people surveyed indicated they would no longer use taxi or car services. This could present a challenge, as it indicates a rise in ride-hailing. As people begin going back to work in a post-pandemic society, this new type of consumer behavior could lead to more vehicles being on the road, causing more traffic congestion and higher carbon emissions.

Indeed, a study performed by Vanderbilt University projects that in San Francisco, the increase in single-occupancy vehicles and traffic congestion will add 556,000 to 2,736,000 traffic hours for commuters every day. This increase in traffic congestion is also expected to hit other major cities, including New York, Los Angeles, Boston, Chicago, and Seattle. By slowing down daily commutes, U.S. productivity could drop, resulting in a loss of billions of dollars.

Creating a Better World with Microtransit on a Macro Scale

While commuter fear over using public transportation is understandable, there is a way to adapt to these new concerns while reducing traffic congestion and carbon emissions: offering on-demand microtransit.

Microtransit involves using small-scale vehicles like cars and vans to deliver public transportation. Since passengers don’t have to ride with large numbers of other people, they will be more willing to use microtransit vehicles as opposed to traditional public transportation like buses or subways.

While small groups of people can create their own form of limited microtransit through carpooling, when looking at structured ways cities can handle mobility issues such as traffic congestion, on-demand public transportation through ride-sharing is a very viable solution.

Smartphone apps such as the Via Rideshare app already enable people to book ride-share transport quickly and at low cost. By expanding the availability of such microtransit technology, communities can save money on public transportation while fulfilling American desire to reduce their carbon footprint. In the process, traffic congestion will go down and productivity will increase, offering a better standard of life for a post-pandemic society.        

Remix is committed to working with transit agencies and helping them build more livable cities by making informed decisions. Schedule a live demo with our team to learn how Remix can help you.