Since its debut 10 years ago Rapido has expanded its suite of services to include three and four-wheeler rides, rides for women and even courier delivery in cities. There are reports that the company would be making its way into food delivery, having initiated a pilot project in Bengaluru. While refusing to comment on that move, co-founder Pavan Guntupalli spoke to Christina Moniz about the challenges the service faces with state regulations and the growth potential in the offline market. Edited excerpts:
What are your expectations from newly added services like Metro Rides and Rapido Pink?
Since the pandemic we have transitioned from being a bike taxi service to offering three-wheelers and four-wheeler rides as well. We are looking at growing these segments further. The recently introduced Rapido Pink for women passengers has women-only captains (or drivers), and we expect it to be a great entry point for women consumers to try the bike taxi experience and become more comfortable with it. We plan to expand this service aggressively to about 25 cities. We also introduced Metro Rides for last-mile connectivity in cities like Delhi, Lucknow and Chennai and are in talks in Bengaluru. Since this will address an important commuter concern, we expect that it will see a positive response. We also created a category especially for pet lovers looking for transport that allows owners to take their pets with them on their rides. Additionally, we’re looking at a push towards electrification by creating attractive schemes for electric vehicle owners to participate on our platform.
Rapido has been a late entrant in the ride-sharing market. How are you creating differentiation from other established players?
Our main competition is the offline industry and not any other ride-sharing platform because in my view, that is where the growth potential lies. Today, there may be around 25 lakh cabs but only five lakh are online. On an average, Indians take around 20,000,000 auto-rickshaw rides daily, but less than 20% of these are online. Our effort is to convert the offline to online. Our SaaS (software as a service) model has been a gamechanger to that end. We chose to pivot our business model so that we become a technology partner for our captains (drivers) so that they can maximise their earnings by using our product.
On the back of this model, we have grown 2.5x over the last couple of years. We have close to 35 lakh rides happening daily across categories.
We are present in 200 cities, up from 100 cities last year, and are looking at widening our presence to 500 cities this year. Tier-II and III cities are important growth drivers for us, since we get around 40% of our rides from these markets. We take great pride in our ability to create employment on a massive scale too. On an average, we have around 20 lakh captains in Rapido on a monthly basis.
What volume of your business is driven by two-wheeler rides?
Over 50% of our rides continue to come from bike taxis. The bike taxis have a market not just in top cities but also in smaller cities, which is why our focus is on reaching 500 cities this year. In terms of rides and monthly transacting users and captains, Rapido is leading in market share. Having said that, we are leading even in the three-wheeler segment, and in the four-wheeler category, we are market leaders in two key cities.
Since we are no longer restricting ourselves to just bike rides, we also launched a campaign during the Indian Premier League this year to showcase our range of services.
Is the zero-commission model sustainable?
As a zero-commission platform, we only get a daily log-in fee from our captains and yes, that is a hit for us in terms of margins. But we have been able to scale up and grow significantly with this model and were able to reach PAT (profit-after-tax) profitability last year. We believe that this growth model will be sustainable and help us stay profitable.
The company ran into tough territory recently in states like Karnataka where the High Court has ordered a ban on bike taxis. How are you addressing these regulatory challenges?
When we started out in 2015, there was no such thing as a bike taxi service. But today, there are 10 states that have a framework for bike taxis and Rapido has licences for them in these states. Today, one out of three Hyderabadis uses Rapido and one in four Bengaluru residents uses our services. With commuters increasingly relying on bike taxis across markets, we are also seeing state governments displaying willingness to come up with regulation that makes commuting easier. Having said that, this is a time-consuming effort because the regulations and challenges vary from state to state. Our approach is to keep working with different governments and create a framework that is good for the consumer and our captains.