A ride-hailing app is a two-sided marketplace that matches each rider with a nearby driver, sets the fare, takes payment and lets both sides rate each other. People book cabs, autos and bike taxis on it from their phones. Two-sided means that the app serves two groups at once, riders who want a trip and drivers who want income.
The app does four jobs. First, matching: it finds the nearest suitable driver for each request. The industry calls this dispatch. Second, pricing: it sets the fare, which rises when many people want rides and few drivers are free. This is surge pricing, a form of dynamic pricing. Indian rules limit how high a surge fare can go. Third, payment: the rider pays in the app or in cash, and the driver is paid. Fourth, trust: riders and drivers rate each other, and the app tracks every trip on a digital map. In India, the rider usually tells the driver a four-digit OTP at pickup, so that the right rider gets into the right car.
Here is a typical case. You open the app in Kolkata and ask for a cab to the airport. The app shows a fare of ₹640 and a driver 4 minutes away. You pay through a UPI app or a wallet, or in cash at the end. At the end of the trip, you rate the driver. Each week the app sends the driver the earnings through payouts.
The drivers are usually not employees. They are independent gig workers who own or rent their vehicles. Many apps keep a commission from each fare. Since 2025, several large Indian apps charge drivers a fixed daily or monthly fee instead and let them keep the whole fare. This is the subscription model.
Only a few apps survive in each city because of the network effect: more drivers mean shorter waits, which bring more riders, which bring more drivers. Many apps also add other services, becoming a super app or offering delivery. A driver can also come to your own car through driver on demand. In a few cities, mainly in the USA and China, the car that arrives can be a robotaxi. That is not yet the case in India.