Brief History of Ridesharing in America

Brief History of Ridesharing in America

October 24, 2018
history of ridesharing

What is Ridesharing?

Ridesharing or ride-sharing is the practice of sharing rides or transportation, common among daily commuters. According to some researchers at UC Berkeley, the history of ridesharing in America dates back to the 1900s. In recent years, this term has evolved to refer to when a consumer utilizes a mobile app to secure a ride. However before these smartphone apps became popular, ridesharing already a common practice for saving money commuting by sharing a car ride.

What is the History of Ridesharing?

According to research by the Transportation Sustainability Research Center at UC Berkeley, the history of ridesharing in America dates back to WWI. During this period, the US government required people to utilize ridesharing to conserve rubber for the war. Later on in the 1970s, the oil crisis and gas price hikes once again made ridesharing commonplace. Since then, ridesharing has existed in numerous forms such as carpool, vanpool, or airport shuttle.

However, the modern ride sharing industry wasn’t conceived until 2002 with Sunil Paul. Paul was awarded a patent for a “computer-implemented method for determining an efficient transportation route.” The patent explains how a passenger can use a wireless device to request a ride and locate an available driver. In 2011, Paul founded Sidecar leveraging this patent.

Unfortunately for Sidecar, Uber entered the market in 2010 and Lyft (then Zimride) later in 2012. The rising popularity of smartphones and their capabilities allowed these companies to structure informal carpooling arrangements in real-time. They also expanded the scope of ridesharing such as offering vehicle options.

After several years, Sidecar eventually lost traction. Uber and Lyft came to dominate the ridesharing ecosystem. In 2015 General Motors acquired both Sidecar and Paul’s patent.

Ridesharing as Transportation Network Companies

In 2013, the California Public Utilities Commission created a new category for these new ridesharing companies and established operating rules and regulations. Companies such as Uber and Lyft became known as “transportation network companies” (TNC). Furthermore, variations of the term “ridesharing” began to pop up to capture the modern carpooling experience facilitated by a mobile app.

Alternative Terms to “Ridesharing”

Some terms which have sprouted as alternatives to “ridesharing” include:

  • “Ride sourcing” – The mobile app is sourcing available drivers for the rider.
  • “Ride hailing”- Riders express their interest in getting a ride from a stranger through the mobile app.
  • “Drive sharing” – Some drivers share rental cars.

Interestingly, as these TNC’s (ridesharing) services have become more popular, their names have become synonymous with their service. For example, riders would “book a Uber” or “call a Lyft.” This is an important mark in the history of ridesharing. Companies such as Uber and Lyft have come to literally define an industry.

Final Thoughts

The history of ridesharing can be read as a formalization of existing practices designed to save resources for riders. What started out as a government mandate has slowly evolved and transformed to become preferred transportation networks. Led by the innovation of the mobile phone and disruptive companies such as Uber, the mobile app ridesharing revolution continues onward. Which makes one wonder – what will be the future of transportation? What will be next?  

SavvyAdvisor is Our mission is to help people create better lives for themselves through financial education. Let SavvyAdvisor make your life easier!

Around the web

Join the Conversation

Leave a Reply