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The Boston Globe

Business

How ride-sharing services work

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Sidecar and Lyft share many similarities. Here is how the services work:

Passengers: A rider downloads the app and enters credit card information. The app uses the smartphone’s GPS function to send a driver to the pickup location. The GPS then tracks the ride’s distance. At the drop-off, the rider is prompted to use the smartphone to pay an amount — called a donation — that the app suggests, based on an algorithm. Riders have the option of rating the driver; the driver can do the same for the passenger.

Drivers: They undergo background checks and interviews. Vehicles must be 2000-year models or newer in good condition. Both companies provide a $1 million per occurrence excess liability insurance policy. Drivers receive 80 percent of the revenue from each ride.

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