How Much Does It Cost To Make An On-Demand Online Service Like Uber?

App Development Mobile App June 21, 2021
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Busy lifestyle, stringent work hours and a growing amount of smartphone usage, all of these reasons account for the increasing popularity of on-demand online services. One of the most remarkable beneficiaries in this industry is Uber, the ride-hailing and transportation-based app, functional across 63 countries in North America, Europe, Asia and Australia. 

Uber was born in the early entrepreneurship wave of the 2010s, and in less than a decade, ride-hailing became a huge industry in itself. And it is further commendably used by entrepreneurs and operators as a framework for other on-demand online transportation market segments like food delivery, freight shipping and self-driving. 

If we look at its trajectory in the last decade, we notice a steady growth in number of users and revenue. The number of Uber trips grew from 140 million in 2014 to 6.9 billion in 2019. It reached the 10 billion landmark in 2018.

Currently, Uber has 1 million active monthly users across the globe. 8% of online adults are using Uber at least once a month. 

Founded by Travis Kalanick and Garrett Camp, Uber is an archetypal disruptive idea. It peaked its market share in 2016 when it had nearly 87% coverage. With the rise of competitors and local entrepreneurs with similar business models, it has now reduced to 71%. 

OVERVIEW OF THE ONLINE TAXI SERVICES MARKET

The taxi app market in the US and across the globe is growing at a swift pace. According to Grand View Research, the total revenue of the US Taxi App Market was $14.7 billion in 2019, which is seen after a whopping growth of $3.7 billion since 2015. Last year, due to the coronavirus crisis, it took a stoop to $5.1 billion. 

According to Business of Apps, Uber and Lyft both experienced a 90 percent drop in rides in the year 2020. However, MarketWatch experts suggest that post-pandemic, there’s going to be a steep growth visible in the ride-hailing and ride-sharing market. The ride-hailing market is expected to grow by $47.03 billion during 2020-2024 progressing at a CAGR of 15%.

ResearchAndMarkets.com reports say that the global ride-sharing market is projected to grow to USD 117.33 billion by 2021 from USD 75.39 billion in 2020. 

With over a 100 million active taxi users in the USA, now is a good time for any entrepreneur to tap into the market and provide more options and better services by creating  app like Uber.

We’ll mark out the key functionality of an on-demand online service like Uber and also discuss Uber’s business model, and then finally answer, how much to create an app like Uber?

KEY FEATURES AND FUNCTIONALITY 

Any on-demand service app has three units - 

  • User App - available for the end customer on play store or app store
  • Driver App - available for fleet drivers where they get message alerts about users and can navigate routes. They can also review their stats and monthly earnings. 
  • Admin Panel - this is where the business can get all the analytics and reports about their service and manage customer support for the same. 

The essential features in a user app like Uber are - 


  • User signup & Login 
  • Vehicle tracking in real-time (geo-tracking)
  • Booking
  • Fare estimate calculator 
  • Chat & call support
  • Payment integrations 
  • Share live ride tracking with friends 
  • Reviews
  • Push notifications 
  • Payment and booking history
  • Admin Panel
  • Customer resolution center

How does Uber earn?

Unlike traditional taxi cab services, Uber doesn’t own its fleet of vehicles. Uber cabs belong to the individual drivers who are a part of a huge network. This is why the average wait time for pickup is five minutes in 63 countries.

Uber’s primary revenue model is commission-based. It charges all associated drivers a certain percentage fee per ride based on geography and luxury level of the cab. 

It also leverages dynamic pricing which is basically markup economics. In times of heavy demand, for instance, rain, major events in the city and holidays, Uber’s algorithm increases the price of the rides. A “surge variable” is essentially a markup multiple that is positively correlated to the increase in demand for the service.

For a brand like Uber which has an immense pool of users, promotional partnerships also pay well. It has previously collaborated with brands like Pepsi, Hilton, BMW, Starwood, and Spotify to bring more convenience and luxury to the user, meanwhile benefitting from the marketing budget of the partner. 

So how much will it cost to make an on-demand service like UBER?

When you’re creating an app like Uber primary geo-location features are crucial, including tracing mobile location, offering direction details and incorporation of the mapping software. Collectively, they take up 400-500 hours of development time.

Registration, social media, email login and user profile features usually take 100 to 120 hours of development. Cash-based and credit-based payment integrations take 130 to 160 hours. Push notifications and messages can be collectively developed in 20 hours. 

UI and UX development are the two keystone aspects when you consider how to create an app like Uber. Intuitive design creation will take approximately 160 hours.

The average development cost in the US is $35-$50 per hour. If you include project management and quality assurance, the cost of making an app like Uber would land somewhere between $40,000 and $50,000.

Final Word 

A fleet-based on-demand online service like Uber is a great choice of business if you’re looking to tap into the app market, in terms of an already established user base and high ROI. We have already discussed the main features required and answered how much to create an app like Uber. If you are interested in going forward, give us a ping right away and we can start discussing how we can make a more intuitive and better version for an on-demand service as compared to the ones present in the market right now.

If you want to further break down the costs of making an app like Uber, and understand how much each feature costs, you can first head on to Valere’s cost calculator It’s a trustworthy tool used by thousands that uses a standard rubric of costs and generates an estimate of the cost of any app based on the preferred choices of the entrepreneur. 

For instance, there’s a difference in costs based on factors like iOS or Android development, size of the project, social or personal service, complexity of UI and UX design, resourcefulness, security, design and theme, number of platforms/devices, third party integrations, complexity level and custom add-on features.

It offers a clearer and straightforward vision for anyone who knows little about app development and the costs of it. 

So, have a look at the cost calculator or contact us right away to understand how to create an app like Uber! Let’s discuss it today.

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