Car Rental Software, Ride-Hailing App or Grocery App: Which to Startup?

MobyteLab News   •   Jan 30, 2020

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As an entrepreneur, one is usually faced with the challenge of deciding which industry to venture into. Before delving into any industry, it is important to be armed with sufficient knowledge about the perks and cons of the industry in question.

In today’s world, three major industries are currently taking giant strides: car rental, ride-hailing, and grocery industries. As a result, many entrepreneurs are torn between choosing any of these industries to invest in.

If you are facing this dilemma, then you may need to survey the various markets and decide which industry will offer the most benefits to you. This article will serve as a guide to understanding the various industries as well as the perks and cons attached to them.

The Car Rental Industry

The car rental industry has massively expanded within the last decade. Its expansion can be tied to two major reasons. Firstly, within the past few years, there has been a growing need for car rental services. Many car owners have abandoned their cars for car rentals which may be due to personal reasons. Similarly, car rental services have proven to be quite useful for commuters who want a taste of luxury and passengers who have no other means of transportation.

Another reason for the massive expansion of the car rental industry is the inclusion of new trends. For instance, many car rental companies have abandoned manual booking systems for a more digitized system. This digitized system involves the creation of car rental software for booking cars and making payments. Consequently, commuters can now heave a sigh of relief and enjoy a seamless method of renting cars.

Pros of Car rental Industry

It is important to note that the car rental industry has its pros and cons.

One advantage of investing in car rental software is that it creates an influx of clients. In today’s world, many people are seeking a seamless way of renting cars. As such, creating a car rental software will help you to drive in a large number of customers and subsequently, rake in massive profits.

For example, the average cost of renting an economic car per day/week ranges from $67 – $228. With an average of  10 customers per day, company owners could make thousands of dollars each day, thus ensuring a swift return on investment (ROI).

Cons of Car rental Industry

One major disadvantage of investing in a car rental booking system is the level of competition in the market. The car rental industry is filled with tons of competing companies such as Hertz. As such, it may be really difficult to beat the competition and become one of the leading car rental companies in the industry.

car rental software

Car rental software for the Car rental business

What is the Cost of Developing a Car Rental Software?

To find out the average cost of developing a car rental software, one would have to first outline the core features which it must contain. These include:

  • Admin panel
  • User login
  • User profile
  • Push notifications
  • Architecture design
  • Rental history
  • Geolocation features
  • Search bar
  • Payment options

Generally, each feature has an estimated timeline for completion. Thus, developing the app may consume between 810-1010 hours. Subsequently, the cost of building a car rental software ranges from $12000-$15000.

The Grocery App Industry

Grocery shopping has taken a sharp turn in the 21st century. Shoppers no longer have to stick to the traditional method of shopping which involves going to brick-and-mortar stores to get groceries. However, with the introduction of the grocery delivery app, shoppers can now order groceries from the comfort of their homes and get it delivered to them swiftly.

The main motive behind grocery apps is to provide speedy delivery and offer a convenient mode of shopping to shoppers. So far, it has accomplished its aim.

Pros of Grocery Delivery App

As stated earlier, grocery apps have completely taken over the grocery retail industry. Previously, shoppers would have to go to the nearest grocery store to shop. Now, they can easily do this from the comfort of their homes. This new and improved system of shopping has led to a tangible increase in the number of shoppers. Studies have shown that the top five grocery apps made a profit of about $120 million within five months. Thus, delivery apps for groceries help entrepreneurs to gain swift ROI.

Another advantage of investing in an app for delivering groceries is that it will help entrepreneurs to keep track of orders. Here, grocery store owners do not have to worry about vices such as shoplifting or loss of products.

With a grocery app, entrepreneurs can equally ensure customer loyalty with discounts, offers, and loyalty programs.

Cons of Grocery Delivery App

Although the grocery delivery app is very lucrative, investing in these apps has its risks and cons.

For starters, the development process consumes hours and requires huge start-up capital. In the same vein, it may be difficult to gain swift ROI. To maximize profit, one would have to beat the competition – a feat difficult to achieve.


Grocery delivery app increase in the competitiveness of the grocery store in 2020

What is the Cost of Building a Grocery Delivery App?

It is important to note that the cost of building an on-demand grocery delivery app solely depends on the kind of app you are looking to develop. You will need a full team of developers to build even the most basic app. Your team should contain:

  • 2-4 app developers
  • A project manager
  • 1 back end developer
  • 1-2 UI/UX developers
  • A system administrator
  • A database manager
  • A business analyst

In essence, the cost of developing an app for grocery delivery could run into thousands of dollars. To build a simple and basic app, an entrepreneur would need a budget of roughly $10,000-$30,000.

However, it is more advisable to create an app with sophisticated and modern features. This could cost about $345,000.

Thus, it can be seen that developing an app for grocery delivery requires a lot of capital.

The Ride-Hailing Industry

The ride-hailing industry is one that has evolved and grown astronomically within the past two decades. Originally, the taxi business sector was quite linear. Commuters had to walk to the bus stop and halt a taxi to get to their destination.

Today, commuters can easily get a taxi without having to walk to the nearest bus stop. With the introduction of ride-hailing apps, transportation has been made simpler and more seamless.

Ride-hailing apps work straightforwardly. The commuter registers and signs in. He then types in his location and the app automatically displays drivers within the area. The commuter then books a ride and the driver arrives at his pickup location within minutes.

As a result of its seamless nature, taxi dispatch apps have become increasingly popular. Experts even suggest that within the next few years, the industry will witness even bigger growth than before. This is due to the new trends which are being incorporated into the industry.

Find out more Ride-Hailing Industry 2020: Opportunities and Challenges


One major advantage of investing in a taxi fleet management software is the constant evolution of the industry. As stated earlier, the industry is expected to grow even bigger within the next few years. So, entrepreneurs who seize the opportunity to build a reliable ride-hailing app would gain huge returns on investment and rake in massive profits.


Since the introduction of Uber, several other ride-hailing companies have sprung up, creating stiff competition in the industry. As such, many ride-hailing companies are constantly engaging in price wars. What does this mean? The implication of these price wars is that taxi dispatch companies will be under constant pressure to reduce their rates. Commuters will always want to go for a cheaper option. As such, these companies will be forced to charge lesser rates to beat the competition. Consequently, less profit will be made.

What is the Cost of Building a Ride-Hailing App?

Taxi app development involves the use of standard technology. To build an app like Uber, one would need to incorporate certain core features. It is important to note that building a taxi dispatch app involves building two separate panels: the driver app and the passenger app. The former will enable drivers to accept rides and pick up passengers. The latter is strictly for passengers’ use. 

The cost of building a taxi dispatch system solely depends on the company type, technology, app platform and the features you want to incorporate into the app. However, the average cost of building an app like Uber could range between $57,000 and $114,000.

taxi management software, taxi app solution

Ride-hailing has big Opportunities and Challenges in 2020 -Taxi dispatch software, taxi management software

Market Size of Each Industry 

For entrepreneurs looking to invest in any of these industries, one should be armed with proper knowledge of the market size of each industry and its projected growth. 

The car rental industry: This industry is one that has witnessed several changes and growth within the past few years. In 2016, the car rental industry was valued at about $58.26 billion. Within two years, this figure grew and the industry’s global revenue increased. In 2018, studies showed that it was estimated at $88.2 billion. The creation of car rental software and apps is a major factor linked to the growth of the car rental industry. Currently, reports predict that by 2025, this industry will be estimated at about $125.4 billion, thus registering a CAGR of 5.1%.

The grocery app industry:  As of 2018, the grocery app industry was estimated at about $ 84.46 billion. Experts predict that this figure will rise within the next few years. Currently, millions of shoppers are abandoning the traditional method of shopping for a grocery app. Thus, this online method of shopping is steadily on the rise. By 2025, there will be an even larger number of shoppers who are willing to use grocery delivery apps and consequently, larger revenue garnered globally in this industry. 

The ride-hailing industry: As of 2017, the ride-hailing industry was valued at a whopping $36.45 billion. With the introduction of more ride-hailing companies and more commuters who are willing to use these services, this number has grown astronomically. According to expert predictions, by 2025, the global ride-hailing industry will be estimated at $126.52 billion, thus growing at a CAGR of 16.5%.

So far, China and North America are the largest contributors to this industry. North America makes up about 35% of the total revenue garnered globally. 

Factors to Consider Before Making a Final Decision

As an entrepreneur, you are probably torn between investing in a car rental software, grocery app or ride-hailing app. However, before you make that final decision, it is important to consider a few factors. These include:

  1. Budget: What is your budget? Each app requires a certain amount of money as the start-up capital. If your budget is low, you may need to stick to the least expensive option. However, if you have sufficient resources, you can then make your choice without being limited to one option.
  2. Passion: As an entrepreneur, you must have heard the phrase: “Follow your heart” a thousand times. Well, this phrase can also be applied in investments. It is best to delve into the industry which best suits your passion and level of expertise. Investing in a venture which you have zero knowledge or passion for will only fail.
  3. Expectations: It is also important to consider your expectations. If you have high expectations regarding ROI, then it is best to choose the industry with the highest chances of offering swift returns on investment.

Which One to Startup?

Making a final decision solely depends on your expectations and needs. If you are seeking to invest in an industry with the lowest start-up capital, then it is best to invest in car rental software.

However, for-profit maximization and an impressive ROI, it is advisable to invest in a taxi fleet management software.

Whatever decision you make, you should note that the main goal is to beat the competition and establish a reliable brand. As such, your app should contain all the necessary features required to stay on top of the competition.

If you had an option and thinking about Self-Building or Outsourcing: Which is Most Cost-Effective? Click here to find out the pros and cons of each way


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