Thinking of starting your own mobility business?

Talk to the world's best mobility service provider and get your business sorted!

Let's Talk

Carma Business Model and how does it make money

Businesses are getting higher demands and popularity in the market post their acceptance in the market. The Carma Business model has risen to success owing to its strategic vision and progressive approach to target the buyer market rightly.

Carma Business Model | Jugnoo.io

Here is a small write-up that explains Carma’s Business model and how you can strategize their vision to grow and expand in the market.

The carpooling system has been in the market for years. It has been one of the go-with-flow business models that have helped many businesses to excel in the competition. Carma has opted for a similar approach, envisioning shifting market demands and requirements in the carpool vertical.

Carma Business model: An overview

The company was founded in 2007 and was formerly known as Avego. Carma is a world-leading company in real-time carpooling technology that empowers travelers to team up to improve their commute. It includes adding comfort and convenience to every next trip that is made with Carma.

Headquartered in Cork, Ireland, with offices in San Jose, CA, and Austin, TX. Carma’s customers include cities, governments, public transport operators, and thousands of individual consumers and private transport operators. The carpooling app is made to make sure all the essential segments of the business model are well equipped and acquainted with the decided workflow.

Since 2007, Sean O’Sullivan’s SOSventures has been investing in Carma business model to promote carpooling in various global markets. Carpooling Startup Carma launched API, and offered $2.5M for developers to drive ride-sharing adoption.

Carma is a platform and mobile app that allows users to identify local commuters with whom they can share rides. It’s hardly a novel concept, but Carma wants to differentiate itself from a new breed of “ride-sharing” firms that allow customers to find rides on demand.

A rising number of transportation apps, such as Uber, Lyft, and SideCar, connect consumers with drivers who are not registered to operate taxis or livery vehicles. Carma, on the other hand, isn’t one of such services. Instead, it aims to link passengers in such a way that they can share the cost of a ride.

The app uses GPS monitoring and matching to allow users to share the cost of a ride, which is a fraction of the price of an Uber or Lyft. The only issue is obtaining the critical mass of users required to make the service viable.

Carma business model isn’t purely “on-demand,” but it is attempting to make carpooling more “real-time.”

Investment and Funding of Carma

Carma Technology has raised a total of $14.1M in funding over 13 rounds. Carma technology’s latest funding round was a Convertible Note – IX for on September 27, 2021.

It has 1 leading investor as of now, i.e., SOSV.

Carma Technology has a post-money valuation in the range of $10M to $50M as of Dec 14, 2010.

How does Carma Business Model work?

You can choose to be a driver or a rider after creating an account and logging in (or both). The carpool software then connects the drivers’ spare seat capacity with the riders’ demands, depending on whether they are travelling the same route at the same time.

Drivers receive a pricing incentive in the form of electronic micropayments from riders at the end of each trip to cover fuel costs.

Carma Business Model | Jugnoo.io

Carma is usually less expensive than a taxi, Uber, or even riding the bus, because the concept of carpooling is to share the expense of driving while also helping to alleviate traffic congestion by getting automobiles off the road.

Carma users are said to have saved 287 tonnes of CO2 and 31,891 gallons of gas in the last two years, making it both environmentally benign (a big problem in cities with a lot of traffic) and cost-effective.

Major Stakeholders

The major stakeholders are –

Customers or Riders: Individuals who are going to request a ride for carpooling
Drivers: Individuals who are driving the vehicle and will get the request from the customers

Customer App

This is a dedicated app where customers can find, locate and book their rides as per the availability of the vehicles. The app gives a clear indication of the availability of the rides as well as the location of the vehicle. If required, the customers can ask for customized routes also in special cases. Again, this depends on the serviceability or agreement from the driver’s side. The app is also a go-to tool to let people find and avail of the services in a better place.

Driver app

Similar to the customer app, there is a dedicated driver app that gives information about the ride requests coming up throughout the travel. The driver is the sole decision-maker to either accept or reject the ride request based on various constraints and considerations. The app gives the advantage of letting the drivers know about the extra miles and route that he has to adhere to while reaching out to the customer. The driver app helps in allowing the drivers to stay confident and make informed decisions about the business.

How does Carma make money?

The company has expanded its reach to nearby areas with perfection. The seamless growth of the business shows how proficient the team is in making and exploring the underlying economic opportunities of growth.

The brand works on commission models. They charge a fixed amount from all the involved stakeholders. According to the Carma Terms of service, the earnings of the rider(s) payment (consisting of a fixed price per trip and a variable per mile fee) are split between the driver (85%) and the company (15%).

Hence, with the least manual involvement, it becomes pretty easy for the brands to earn a decent amount.

How to replicate their business idea?

Getting started with a business idea that has already been proven as a successful use case is a smart move. If you are a startup or are looking to establish your name in the carpooling business vertical, now is a great time to get started. The overall functionality and operational measures are taken into consideration while making an informed decision are easier to opt for.

Carma Business Model | Jugnoo.io

Carpooling business idea has gained visibility and popularity in the market in the past years.

Choosing Jugnoo over others

Jugnoo has been in the market for years. The software offered by the team is known to create a platform where you can launch, scale, and expand as per the demands. Jugnoo offers a quick SaaS platform that is easy to integrate and gets understood within days. Ours is an easy-to-configure platform that can make your business operations move smoothly and seamlessly.

The cost-effective solution comes in a package of solutions that can be further utilized to give new directions to your business. If you have a business plan or are looking for specific features in your business, feel free to talk with our experts. We can customize it and introduce a set of features as per your demand. You can also visit our resources section to get an overview of how we can help you and your business to grow in the market.


Carma business model has been doing a tremendous job in acquiring and expanding its reach in the carpooling vertical. If you are looking for a quick expansion of the business with fewer financial resources required, you can think of adapting their business model.

For tech-related things, you can choose to contact Jugnoo and get your tech sorted well in advance.

Related Resources

No Comments »

Leave a comment

Your email address will not be published. Required fields are marked *

Jugnoo Post

Want to hear more about tech in mobility solutions?

Get tech related resources delivered to your inbox directly
Jugnoo Post

Having some queries?

Drop us a message and we will get get back to you shortly.

Jugnoo © 2024 Socomo Technologies Pvt Ltd. All Rights Reserved.