Rapido, the popular bike taxi and ride-hailing startup based in Bengaluru, is planning to enter the food delivery market in India. The company is exploring ways to compete with Zomato and Swiggy, which currently dominate the online food ordering industry.
According to reports, Rapido has started discussions with restaurant partners to develop a new business model that could introduce lower commission fees for restaurants. This move could disrupt the food delivery industry by offering a more affordable and efficient alternative for both customers and restaurant owners.
Rapido Expansion and Growth Plans
Since its launch in 2015, Rapido has grown rapidly, becoming a major player in India’s ride-sharing industry. The company has now crossed $1 billion in annual gross merchandise value (GMV) and continues to expand its presence across multiple cities.
Rapido is currently in talks with restaurant operators to explore food delivery services using its fleet of two-wheelers. While exact details are yet to be finalized, Rapido already provides delivery services for Swiggy and ONDC (Open Network for Digital Commerce) food network. This experience in managing deliveries could help Rapido establish itself in the food delivery sector.
Building on Recent Investments
Rapido has raised significant funding over the past year, which has strengthened its ability to expand into new business areas. In February, the company secured $30 million in investment from Dutch firm Prosus, following a $200 million funding round led by WestBridge Capital. These investments helped increase Rapido’s valuation to $1.1 billion.
Interestingly, Swiggy is one of Rapido’s investors. However, reports suggest that Swiggy’s investment does not prevent Rapido from launching its own food delivery service, allowing the company to compete freely in the market.
Ambitious Expansion Plans for 2025
Rapido currently operates in over 100 cities across India and aims to expand to 500 cities by 2025. The company has been growing steadily, with daily ride volumes increasing from 2.6 million in November to around 3.5 million rides per day in recent months.
The company’s business model focuses primarily on bike taxi services, but it has also introduced auto-rickshaw and four-wheeler ride services. Unlike traditional ride-hailing apps, Rapido follows a subscription-based model, where drivers pay a fixed daily or weekly fee instead of a per-ride commission.
Challenges in the Food Delivery Market
The food delivery industry in India is currently dominated by Swiggy and Zomato, which hold a strong duopoly. However, both companies have faced criticism from restaurants over high commission fees. Over the past year, they have also experimented with faster delivery services and increased platform fees to boost profitability.
While food delivery growth has slowed down, Rapido sees a chance to introduce a more sustainable and cost-effective business model. By using its existing fleet of bike taxis, the company could offer faster and more affordable food deliveries to customers.
New Competitor for Zomato, Swiggy
Rapido’s entry into India’s food delivery market could bring new competition for Swiggy and Zomato, giving both customers and restaurants more options. If the company successfully implements a low-cost and efficient delivery system, it could transform the online food ordering industry in India.
With its rapid expansion, strong financial backing, and experience in logistics, Rapido has the potential to become a major competitor in the food delivery sector while continuing its leadership in bike taxi and ride-hailing services.
