The sector of the ride-hailing business is not a very dynamic one. Although many have come and gone on regional levels, however, none of them could match up to the monopoly that Uber and Ola have had on it.
Uber, a San Francisco-based ride-hailing company that has since branched out to several other services too like food delivery, rentals, and more, and Ola the Bangalore based ridesharing company have maintained a decent duopoly over the sector for years.
UK-headquartered consultancy firm PublicFirst reported that in 2022 India was Uber’s biggest market with 8.5 million monthly riders and 600,000 monthly drivers while Ola as per the company in 2018 claimed was serving almost a billion rides per year.
However, now Rapido has been steadily rising as a decent competitor to the ride-hailing giants in the country.
What Is Rapido Doing?
One of the ways Rapido is banking to be different from Uber and Ola is by changing the commission model for the drivers to a subscription model.
In December of 2023, they launched their new cab services, expanding their bikes and auto booking services. The company’s co-founder Pavan Guntupalli said at the launch “We are incredibly excited to introduce Rapido Cabs pan India following the immense success of our bike taxi and auto services across the country.
Our innovative SaaS-based platform revolutionizes the conventional commission system for drivers, tackling the persistent challenge of commission sharing with aggregators. This pioneering approach ensures that drivers incur only a minimal software usage fee, marking a significant shift in the industry.”
He further added, “It also prioritises customers by ensuring lowest price guarantee and making our services exceptionally affordable for all.”
As per reports, currently, based on the commission model around 30% is charged to the drivers on each ride.
But the new model will charge a subscription fee of Rs. 500 after a driver once they reach Rs. 10,000 of earnings, as a nominal fee. According to reports, Rapido brought in $130 million from investors over the years and has expanded to 100 cities across India with a customer base of 25 million and over 1.5 million driver-partners.
Guntupalli said how “The cab-hailing industry has been stagnant for the last five years. The subscription model will help grow that. We wanted to do something that is not just accessible to the top 7 per cent of the population, but millions of people who live not just in the Bengalurus and Delhis but also the Patialas, Siliguris and Jaipurs of India.”
As per reports, Guntupalli was quoted by NDTV Profit saying that “As of now, we are in all the top seven cities of the country, and the response has been just phenomenal.” He further said “In cities like Hyderabad, where we started off early, we are close to 25% of the market share already. All in all, we are doing more than 1.5 lakh rides a day in this category.”
He also commented on how cabs will start to rise to almost 25% of their business soon saying “We do more than 15 lakh rides a day overall, and cabs are contributing to 10% currently. Through the course of the year, we see it contributing to around 20–25% of our business.”
Guntupalli also commented on how the cab business still caters to the elite sector “Of course, the cab operators brought some efficiency and technology into the market, but despite all this revolution, 10 years later, how come the buses are still overcrowded and people are still going through such a hassle while booking cabs?”
Rapido also doesn’t plan to just stick to cabs or bikes and auto primarily and wants to diversify according on city to city basis. ravind Sanka, another co-founder of Rapido, said “We aim to explore new vehicle segments and provide more personalized commute solutions tailored to the specific needs of passengers. Our goal is to ensure that transportation remains accessible to a wide range of individuals, offering a diverse and inclusive range of options that cater to varying economic circumstances.”
