Report on Designing Ride, Sharing Service

         To run the ridesharing business efficiently, it is essential to focus on those things which are necessary for running the ridesharing business. The ridesharing app will be required as other ridesharing businesses have, e.g., Uber or Lyft.  The software development is estimated to cost $145623 in the first year, and in the upcoming year, the development or upgradation cost will increase with the rate of 7%.  For creating awareness about the business in free marketing is required. In the first year, the marketing cost is estimated to be 117000 which will grow with the rate of 5% in the upcoming years. The car lease is expected to be 160000, and its amount will increase with frequency of 5% in the following years. In the first three years, the business might be unable to generate profit; however, after three years, the company will start to make a profit. The tax rate is assumed to be around 30% (Davis & Davis, 2011).

         In the above table, the breakeven analysis of ridesharing business can be seen the revenue of the company is more significant than fixed & variable cost which is a sign that company is generating a considerable amount of profit. In the market there are many ridesharing alternatives are available like UBER and LYFT. They are providing the ridesharing services to the people, and many people around the world are taking benefit from their services (Atrill, 2014).

            The things which are making this business a bit different from them is that it will allow free cars/electric cars as well. Not only this idea will bring a competitive edge to the company but will also different the company from other ridesharing businesses. The estimated cost of the software & technology required for this purpose is included in the software development expenditures. It can be seen that in the beginning, the business might be unable to generate profit, but in the following years, the company will become successful (Davis & Davis, 2011).

References of Designing Ride Sharing Service

Atrill, P., 2014. Financial Management for Decision Makers. 7 ed. s.l.:Pearson Higher Ed.

Davis, C. E. & Davis, E., 2011. Managerial Accounting. s.l.:John Wiley & Sons.