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How is IoT being used by the ridesharing industry?

  • Mallika Rangaiah
  • Jun 09, 2020
  • Updated on: Jun 23, 2021
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Wandering around the bustling streets, looking to hail a taxi is now a concept of the past. Not with so many new applications offering a universe of new and simple features for commuting are filling up the transport world.


Why would you saunter around the road, searching for a taxi in the hot blistering weather or the pouring rain or depend on uncertain bus services or dubious subway systems when you can order a cab in advance and have it arrive on your doorstep? Ridesharing is slowly emerging as the preferred and more convenient option among commuters. 


As reported by The Street, the ridesharing apps are slowly overpowering car rental services as well as car ownership.  This suggests that people would prefer hailing an Uber or Lyft overdriving or purchasing their own vehicles. This is largely owing to the convenience of these services.  


One technology that is largely responsible for empowering Ridesharing firms is the Internet of Things (IoT)



Ridesharing apps and IoT


It's not just for the consumers that the Internet of Things (IoT) has worked out favorably, but also for the business operators. As claimed by Digitalist Magazine, a large degree of data can be gained from using IoT, in the context of the safety and behavior of drivers owing to the vehicles being connected through their devices. IoT allows managers to assess and keep track of their drivers in real-time via GPS and also to measure if there is any scope for enhancement or any violation cases like overdriving or speeding.


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Uber, the ridesharing app requires no explanation. In this app, the IoT features have been bolstered via Uber Fleet, an app that allows fleet partners to augment their business with their driver-partners. The Uber Fleet app allows fleet owners to keep track of their driver’s performance metrics in detail.  


Uber and Airbnb are interesting because they are really internet of things platforms - Tim O’Reilly, Technology guru and founder of O’Reilly Media


Now that I’ve mentioned Uber let’s talk about how Uber mints on IoT. Basically, Uber’s business model enables it to deploy the data gained through IoT. By making use of the data like the location of the driver and passenger as well as the payment approach, Uber helps in pairing the right passenger with the right driver.


The app facilitates a whole new level of customer involvement, handing more power to the customer. The business model of the app also enables a new IoT value chain. The ridesharer has placed itself between the product manufacturer and service operators that employ the product and established itself as a facilitator of service. 


Owing to the IoT’s enormous potential, various ridesharing companies have been bolstering their service range. For instance, as reported by The Washington, Uber, and Lyft have ventured into the healthcare industry and are preparing transportation services for healthcare facilitators. 


The ridesharing industry has regularly been strengthening over the past couple of years with an escalating degree of customers around the globe testing out and seeking the advantages of hitching a ride when and where they require it at an economical cost. 


Owing to this advancement, an increasing number of businesses are venturing into the arena. While we’ve already briefly touched upon IoT’s significance in the sector, let’s discover in detail how IoT is impacting ridesharing as well as how it is enhancing the consumer experience.


(Speaking of enhancing customer experience, take a look at how Disney World is doing this!)



Role of IoT in Ridesharing


“We have a deep need and desire to connect. Everything in the history of communication technology suggests we will take advantage of every opportunity to connect more richly and deeply. I see no evidence for a reversal of that trend.” — Peter Morville



The image sheds light on the role of IoT in Ridesharing ranging from overseeing drivers in real-time, travel efficiency, better vehicle maintenance, partnership opportunities and tipping drivers

Role of IoT in Ridesharing


For any ridesharing business to flourish, there is a desperate need to seek advantage from the features and benefits offered by IoT. There’s a variety of ways in which IoT is being integrated into the Ridesharing apps. 


1. Oversee Drivers in Real-Time


One of the ways in which IoT is being employed in ridesharing is for overseeing drivers. Having a massive collection of vehicles, it becomes crucial to oversee if the drivers are administering them appropriately as well as to ensure that no violations are taking place. This becomes possible through IoT with connected devices allowing companies to gain access to a plethora of data regarding the driver’s activities. GPS and the other programs enable companies to keep track of the ongoings in real-time and ensure that activities like canceling on passengers without good reason or overspeeding are not occurring. 


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Alongside this, performance metrics also make it simple to gauge whether there is any scope for improvement in terms of the safety of the drivers. With all the information gained, the companies can be aware, in case their drivers are operating in extra long hours without proper breaks, as fatigue is a factor which can prove to be extremely dangerous in case of occupations like driving. 


2. Enhanced Maintenance of Vehicles


Cars are one of the biggest and most valuable investments for all ride-hailing companies, making their maintenance and preservation, a top priority. IoT proves to be a crucial aid when it comes to enhancing the maintenance of vehicles. For avoiding any inconveniences like the car breaking down during a trip, the onboard diagnostic ports that are placed on cars, as well as the applications working with them, make it easier for companies to handle their fleet performance as well as note any issues promptly. 


The data gained from IoT can also aid in analyzing aspects like fuel consumption as well as idle time for cutting down on costs and sparing drivers from being responsible for the task of manual reporting. 


3. Travel Efficiency


Yet another way in which IoT is providing an edge to ridesharing companies is by enabling travel efficiency. The vehicles are required to adopt electronic logging devices which negate the necessity for drivers to manually input their hours as well as routes, giving them more time to focus on reaching to and from locations. 


Recommended blog - IoT in travel industry


In addition, the GPS systems interacting with apps and other software regarding aspects like traffic circumstances, congestion, roadwork, or accidents allow drivers to gain real-time data on roads for avoiding this means drivers can get real-time information on roads to avoid traffic and adopt faster routes. This helps in saving time, enhancing customer satisfaction, and also enables drivers to be able to include more rides throughout the day. 


4. Partnership Opportunities


Many ride-hailing firms are now partnering with brands and events, to help bolster their business. As I mentioned above, Uber and Lyft are already venturing to take up this approach. For instance, both firms are employing IoT for expanding into the healthcare industry. An example of this is Uber Health which is a dashboard that permits health organizations to arrange rides for their patients without charge. These attributes are proposed to undertake the affairs of patients who frequently tend to miss their medical appointments.  


Uber has also collaborated with the music streaming services Pandora as well as Spotify for facilitating a satisfying riding experience for its passengers, who are allowed to make their own playlists through the Uber app. 


5. Tipping Drivers


An effective and satisfying user experience allows businesses to flourish and drivers to gain better tips, which in turn boosts their satisfaction.  This becomes possible with IoT.  With enhanced and user-friendly tipping procedures, owing to internet-connected devices, frequent and high tipping becomes more probable.




The Internet of Things (IoT) has been strengthening operations as well as kicking open a plethora of avenues for ridesharing businesses. Of course, there is always scope for these businesses to boost themselves owing to which many third-party applications are also being sought to focus upon various issues.


For instance, the Mystro app aims at offering the drivers options in terms of the rides that they can opt for. It also enables them to work without being required to touch their screen. Various more opportunities loom ahead as the IoT continues to bolster through industries. It remains to be seen how deeply technology will impact the ridesharing world in the future.

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