How To Start An On-Demand Electric Taxi App Business?

Last Updated 27th June, 2025

The ride-hailing industry worldwide is progressing, with the on-demand electric taxi app business garnering considerable momentum. As governments push for sustainable mobility practices and enforce stricter emissions regulations, the demand for on-demand electric taxi apps is surging. 

Industry reports indicate that the electric taxi market is set to grow at an impressive CAGR of 12.55% from 2025-2030, with the market size projected to reach $68.10 billion by 2030. Thus, making it a prime opportunity for entrepreneurs and fleet operators to start an on-demand electric taxi app business that aligns with future mobility trends.

But, success in the EV taxi app business requires strategic planning, the right technology, and a deep understanding of the market. Thus, in this guide, we will walk you through the key aspects to start an on-demand electric taxi app business—from understanding the business model and its benefits to effective electric taxi app development strategies.
Hence, whether you’re an established transportation provider or a startup looking to launch an electric taxi app, this blog will provide actionable insights to help you start an electric taxi business and build a scalable, profitable on-demand electric taxi app business.

On-Demand Electric Taxi App Industry—Market Insights

It’s essential to understand the broader industry landscape before directly diving into the on-demand electric taxi app development. The global EV taxi app market is undergoing rapid growth, driven by government incentives, technological advancements, and rising environmental awareness among consumers.

According to industry forecasts, 

• The global EV taxi market size is projected to reach $37.70 billion by 2025 and is further expected to grow to $68.10 billion by 2030, registering a CAGR of 12.55% during the forecast period (2025–2030). 
• The Asia-Pacific region currently holds the largest share of the EV taxi market, accounting for over 42% of the global market. This region is projected to surpass $25.1 billion by 2032,
• North America is experiencing steady and consistent growth, fueled by increasing environmental awareness and attractive government incentives. Leading the charge are the US and Canada, with major cities such as New York, Los Angeles, and Toronto implementing green transportation initiatives.
• Europe remains a key market for EV taxis, with the UK, Norway, the Netherlands, and Germany leading adoption, backed by strong charging infrastructure and pro-EV policies.
• Uber is growing its EV fleet through partnerships with automakers like Nissan and Tesla, offering driver incentives and promoting Uber Green, with a goal to become a zero-emissions platform by 2040.

This surge reflects a steady increase in demand for sustainable transportation solutions, making it a lucrative time for entrepreneurs looking to start an on-demand electric taxi app business

Understanding the On-Demand Electric Taxi App Business Model

An on-demand electric taxi app is a digital platform designed to connect drivers operating electric vehicles (EVs) with passengers seeking eco-friendly ride services. Entrepreneurs planning to start an on-demand electric taxi app business must understand how this model leverages technology and sustainability.

These apps operate similarly to traditional ride-hailing apps but with an added focus on sustainability. Users can book electric taxis on demand or schedule rides in advance while tracking their journey via the passenger app interface.

Unlike conventional taxi services that rely on internal combustion engine (ICE) vehicles, on-demand electric taxi apps exclusively utilize battery-powered EVs, notably reducing carbon emissions and fuel costs. Hence, for entrepreneurs aiming to start an on-demand electric taxi app business, this model offers an opportunity to align with global sustainability initiatives and rising eco-conscious consumer demand.
Here’s how an on-demand electric taxi app works:

1. Ride Request: Passengers request an EV ride via the app, specifying the pick-up and drop-off locations.

2. Ride Broadcast: The ride request is then broadcasted to the nearby available drivers.

3. Ride Acceptance: Once a rider accepts the ride request, both stakeholders receive each other’s essential information.

4. Ride Initiation: The driver drives to the pick-up locations and commences the ride with a unique OTP visible on the passenger’s interface.

5. Ride Completion: After driving the passenger to their destination, the driver marks the ride ‘Complete’ 

6. Payment: The passenger then pays for the ride via the chosen payment method, which is sent directly to the driver’s wallet after deducting the platform commission.

7. Ride Experience: Both the users can then rate the ride experience and share the reviews via the app.

Top Ride-Hailing Apps Shaping the On-Demand Electric Taxi App Business Globally

As the EV taxi app business continues to gain momentum globally, several industry giants and emerging niche-focused platforms are prioritizing electric vehicle ride services. These apps serve as prime examples for entrepreneurs planning to start an on-demand electric taxi app business. Below are some leading apps in this segment:

1. Uber: Uber, a globally recognized ride-hailing app, recently launched Uber Green services in 2021 that offers electric or hybrid vehicles for rides as an initiative toward sustainability. It connects passengers with drivers using low-emission cars, significantly reducing carbon emissions by up to 44%.

2. Freebee: Founded by Jason Spiegel and Kristopher Kimball in 2012, Freebee offers 100% electric vehicle rides for short-distance transportation. Known for providing free eco-friendly rides in selected cities, Freebee demonstrates how an EV taxi app business can focus on localized, sustainable transport services. Entrepreneurs aiming to start an on-demand electric taxi app business can learn from Freebee’s community-focused operational model.

3. Revel: Revel, a New York-based ride-hailing company, is committed to promoting the adoption of electric vehicles. The app provides sustainable transportation options, aiming to reduce reliance on traditional taxis and take a proactive step in lowering air pollution through greener initiatives. 

4. Gett: Gett, originally launched in Israel and now operational in multiple countries, is transitioning towards offering corporate ground transportation with a strong focus on low-emission and electric vehicles. Its business-centric model can guide entrepreneurs looking to build an on-demand electric taxi app that caters to corporate clients and eco-conscious organizations.

5. Wingz: Wingz, though initially known for pre-scheduled airport rides, has begun integrating electric vehicles into its fleet to meet increasing customer demand for sustainable travel. For businesses considering niche segments within the electric taxi booking business, Wingz offers a great example of how to blend advanced booking features with EV taxi app business initiatives.

6. BluSmart: Launched in 2019, BluSmart is India’s first on-demand electric taxi app dedicated to eco-friendly transportation. It offers fully electric fleet operations with zero cancellations and transparent pricing. Its strategic collaborations with organizations like Jio-BP for expanding EV charging infrastructure demonstrate how crucial strong backend support is for businesses to scale their EV taxi app business successfully.

Key Benefits to Start an On-Demand Electric Taxi App Business

With rising carbon emissions due to conventional vehicles, transitioning to a sustainable transportation alternative is crucial. Starting an on-demand electric taxi app business not only supports environmental goals but also offers multiple economic and operational advantages for entrepreneurs and fleet operators. 
Below are the key benefits of launching an on-demand electric taxi app:

1. Sustainability & Eco-Friendly Image

The global shift towards sustainability has encouraged businesses to adopt green practices. An on-demand electric taxi app business aligns with environmental conservation goals by reducing carbon emissions. As more cities implement low-emission zones and stricter environmental regulations, building an on-demand electric taxi app helps businesses stay compliant while appealing to eco-conscious consumers.

2. Government Incentives & Subsidies

Governments worldwide are promoting electric mobility through tax rebates and subsidies. By choosing to launch an on-demand electric taxi app, businesses can take advantage of these financial incentives, further lowering their capital expenditure. Policies supporting EV infrastructure, such as charging stations, also make adoption easier for new market entrants.

3. Increasing Consumer Demand

Consumers now prioritize sustainability when making transportation choices. A well-positioned electric taxi app can attract a growing segment of environmentally aware passengers who prefer eco-friendly options over traditional cabs. Moreover, corporate clients seeking to reduce carbon footprint prefer booking rides through on-demand electric taxi apps that support green mobility.

4. Cost-Effective Alternative

With fuel prices increasing day by day, electric taxis offer a cost-effective alternative to traditional vehicles. They offer exclusive benefits for both passengers and drivers—benefitting passengers with affordable fares and drivers with less investment of fuel. This helps drivers to save more over time.

5. Future Proofing

Setting up a foot and establishing your brand in this industry now can prove beneficial in the long run with people frequently shifting towards sustainable solutions. As governments are encouraging the use of EVs, adopting this business model will become competitive shortly.

Steps To Start An On-Demand Electric Taxi App Business

Building an on-demand electric taxi app is a tactical and economical move with the industry getting a push from the governments as well as the users to move to sustainable alternatives. However, launching a successful on-demand electric taxi app requires strategic planning with a keen understanding of the market and development strategies. 

Thus, below is a detailed overview of the steps involved to start an on-demand taxi app business:

1. Market Research and Feasibility Study

Building an on-demand electric taxi app requires careful planning, for which understanding the market dynamics and insights is crucial. Before investing and starting directly on the electric taxi app development, it is necessary that you clearly research the industry dynamics, customer pain points, geographical demographics, and competitors in that area. This helps you to define your goals and differentiate your on-demand electric taxi app from the competition out there.

2. Create a Business Plan

Once you are aware of the market dynamics and competitors’ approach, now is the time to create a business plan and define a unique value proposition that will differentiate your EV taxi app business in the market. Set up a budget, identify your requirements, and list down the features and integrations you would require in your on-demand electric taxi app. Here are a few important features for a clear overview:

Passenger App	Admin Panel	Driver App
Easy Login	User Profile Management	Driver Registration & Verification
Ride Booking	Geo-Fencing	Route Navigation
Fare Estimator	Multiple Vehicle Categories	Ride Requests Alert
Book Ride for Others	Subscription Order Management	Availability Toggle
Real-Time Ride Tracking	Commissions Management	Digital Wallet
SOS Alerts	Content Management System (CMS)	Initiate Payout
Ratings & Reviews	Manual Ride Booking	Reviews & Feedback
Ride Sharing	Reports & Analytics	Subscription Offers

These are a few essential features for your on-demand electric taxi app. Apart from this, your EV taxi app must provide a user-friendly experience with easy navigation and must be integrated with essential business APIs such as payment gateways, in-app messaging tools, and more to make it a fully functional, high-performing on-demand electric taxi app.

3. Development Strategies

When building an on-demand electric taxi app, selecting the right development approach is crucial. However, there are two primary development approaches, namely Custom Development and Readymade Software, to build and launch an on-demand electric taxi app. Here’s a detailed overview:

• Custom Development: Building an EV taxi app via custom development provides businesses with comprehensive flexibility over design, features, and branding. This approach involves building an app right from scratch.

• Readymade Software: On the other hand, readymade software is a pre-built framework for building an on-demand electric taxi app. These solutions equip all essential features and functionalities right from the start, allowing you to build your on-demand electric taxi app quickly and more cost-effectively. 

4. Launch the App and Market

Once your on-demand electric taxi app is developed, a strategic launch plan is necessary to gain traction. Plan a phased launch, starting from high-demand areas that the industry players do not heavily dominate. Leverage digital marketing, social media campaigns, influencer partnerships, and referral programs to attract users to the app. Additionally, collaborations with local governments or sustainability initiatives can enhance the brand credibility of your on-demand electric taxi app business. Additionally, continuously optimize the app based on user feedback in order to ensure long-term engagement and growth post-launch.

Which Development Approach is Most Suitable for Your On-Demand Electric Taxi App Business?

Choosing the right development approach is a crucial step when you start an on-demand electric taxi app business. Your decision can significantly impact the efficiency, scalability, and time-to-market of your on-demand electric taxi app.
While both custom app development and readymade software solutions come with their own set of benefits, many businesses planning to launch an electric taxi app today prefer using a ready-to-deploy software solution. Here’s why:

• Unlike custom development, which demands heavy investment, ready-made software solutions involve three times less investment.

• These ready-to-launch electric taxi app solutions come pre-built with essential features, which substantially reduces development time. Thus, allowing businesses to launch in weeks instead of months

• Many readymade solutions undergo rigorous testing before deployment, ensuring stability, security, and compliance with industry standards. This minimizes the risk of unexpected technical issues.

• Modern white-label taxi app solutions offer flexibility in branding, feature enhancements, and extensive scalability options for future growth.

• Most readymade software providers offer dedicated support to help businesses overcome any operational challenges.

One such promising software solution for entrepreneurs planning to start an on-demand electric taxi app business is VivoCabs. It is a self-hosted, ready-to-deploy software solution designed to launch taxi apps across several niches—whether electric taxis, bike taxis, parcel delivery, standard ride-hailing, or others.

The software, thus, helps businesses launch their services quickly with minimal technical complexities. It is an advanced software solution that equips all essential features, functionalities, and integrations right from the outset, that too with a lifetime license for a one-time payment plan—including all possible benefits that a business requires.

Wrapping Up

The transition towards electric mobility is accelerating, and the ride-hailing industry is at the forefront of this shift. As sustainability takes center stage, launching an on-demand electric taxi app is not just an environmentally responsible choice but also a strategic business move that aligns with evolving consumer expectations and government initiatives. While custom app development offers flexibility, readymade solutions like VivoCabs provide a faster, cost-effective, and more efficient way to launch an on-demand electric taxi app and scale quickly.

Hence, by making informed decisions and leveraging the right resources, you can successfully start an on-demand electric taxi app business and position your brand for long-term success in the EV taxi business domain.

FAQs

Q 1. How much does it cost to build an electric taxi app?

Ans. The cost to build an on-demand electric taxi app can vary based on your chosen development approach. Custom app development typically requires a larger investment, often ranging from $50,000 to $500,000 or more, depending on features and complexity. Alternatively, opting for a readymade electric taxi app solution like VivoCabs significantly reduces costs, often up to three times, making it a more economical choice for businesses looking to start an on-demand electric taxi app business.

Q 2. How long does it take to launch an on-demand electric taxi app?

Ans. The time to launch an on-demand electric taxi app depends on the development model. While custom development may take several months or even a year, with a ready-to-deploy electric taxi app development solution, you can go live within a few weeks. This rapid deployment is ideal for entrepreneurs looking to quickly enter the EV taxi app business and start generating revenue.

Q 3. Do I need technical knowledge to start an on-demand electric taxi app business?

Ans. No, you don’t need deep technical knowledge to start an electric taxi app business. Many electric taxi app development providers, such as VivoCabs, offer setup support, along with lifetime licenses and dedicated technical assistance. This makes it easy for non-technical entrepreneurs to successfully launch and manage an on-demand electric taxi app without coding expertise.

Q 4. Can I scale my on-demand electric taxi app business to multiple cities?

Ans. Yes, most on-demand electric taxi app business solutions, like VivoCabs, are built with scalability in mind. You can easily expand your business operations to multiple cities by adding new service locations, managing driver networks, and configuring region-specific settings directly from the admin dashboard.