The ride-hailing industry worldwide is progressing, with the electric vehicle (EV) segment garnering considerable momentum. As governments push for sustainable mobility practices and enforce stricter emissions regulations, the demand for on-demand electric taxis is surging.
Industry reports indicate that the electric taxi market is set to grow at an impressive CAGR of 18.4% from 2024-2032, with market size projected to reach $69.5 billion by 2032. Thus, making it a prime opportunity for entrepreneurs and fleet operators to launch an electric taxi app that aligns with future mobility trends.
But, success in this space requires strategic planning, the right technology, and a deep understanding of the market. Thus, in this guide, we’ll explore the essentials of starting an on-demand electric taxi app business—from the key benefits to the most effective app development strategies.
Hence, whether you’re an established transportation provider or a startup looking to enter the EV ride-hailing space, this blog will equip you with the insights needed to build a profitable and scalable business.
Table of Contents
Understanding the On-Demand Electric Taxi App Business Model
An on-demand electric taxi app is a digital platform that connects potential drivers equipped with electric vehicles with passengers looking for an eco-friendly ride service.
These apps operate similarly to traditional ride-hailing apps but with an added focus on sustainability. These ride-hailing services leverage mobile apps to allow users to book electric taxis on demand in real time or schedule a ride in advance and seamlessly track their journey.
Unlike conventional taxi services that rely on internal combustion engine (ICE) vehicles, electric taxis use battery-powered EVs, notably reducing carbon emissions and fuel costs. This shift aligns with global sustainability efforts and growing consumer preference for eco-friendly transportation.
Here’s how an on-demand ride-hailing 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 that Provide Electric Vehicle Ride Services
Several industry giants and emerging niche-focused ride-hailing apps are now focusing on providing electric vehicles for rides with a focus on sustainability. Here are a few such ride-hailing apps:
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: Launched by Jason Spiegel and Kristopher Kimball in 2012, Freebee was created as an eco-friendly solution for exploring cities. Offering 100% electric vehicles on demand, it provides free short-distance transportation and has since gained widespread recognition.
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. BluSmart: Launched in 2019, BluSmart is India’s first on-demand electric ride-hailing platform, focusing on eco-friendly transportation. The platform achieved an annual revenue of $462.9 million in 2024. Moreover, it partners with organizations like Jio-BP to expand EV charging infrastructure.
Planning to Launch a Similar EV Based Taxi Booking Mobile App?
Key Benefits of Starting an Electric Taxi App Business
With the increasing carbon emissions due to vehicles, shifting towards a more sustainable alternative is crucial. Therefore, electric vehicles play an important role in moving toward a green environment. Here are a few benefits of starting an electric taxi app business:
1. Sustainability & Eco-Friendly Image
The global shift towards sustainability has encouraged businesses to adopt green practices. An electric taxi app business aligns with environmental conservation goals by reducing carbon emissions. As more cities implement low-emission zones and stricter environmental regulations, an electric taxi fleet 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 launching an electric taxi app service, 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 may partner with electric taxi services for their transportation needs.
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 in building a successful on-demand electric taxi app:
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 development, it is necessary that you should 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 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 electric taxi app in the market. Set up a budget, identify your requirements, and list down the features and integrations you would require in your ride-hailing 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 electric 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 app.
Launch a Feature-Rich 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 electric taxi app. Here’s a detailed overview:
- Custom Development: Building an electric taxi app via custom development provides businesses with comprehensive flexibility over design, features, and branding. This approach involves building a taxi app right from scratch.
- Readymade Software: On the other hand, readymade software is a pre-built framework for building an electric taxi app. These solutions equip all essential features and functionalities right from the start, allowing you to build your electric taxi app quickly and more cost-effectively.
4. Launch the App and Market
Once your 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 brand credibility. 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?
Choosing the right development approach to build your on-demand electric app is crucial to ensure its efficiency, cost-effectiveness, and scalability. While each development approach has its own set of advantages and considerations, it is recommended to utilize a readymade software solution to build your on-demand electric taxi app these days. This is because:
- Unlike custom development, which demands heavy investment, ready-made software solutions involve three times less investment.
- Ready-made 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 solution in this space 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.
Schedule a Free Personalized Demo to Know More About VivoCabs
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 enter the market.
Hence, by making informed decisions and leveraging the right resources, your business can be positioned for long-term success in the future of urban mobility.
