Rapido eyes entry into food delivery; to disrupt Swiggy, Zomato's duopoly

Ride-sharing app Rapido is likely to include food delivery service on its platform, according to a report by The Economic Times. The app is in talks with restaurateurs to extend its operations further and enter the new space.

 

According to the news report, a few of Rapido’s executives have been meeting restaurateurs and working on a business plan that will aim to challenge the commission structure of online food delivery platforms like Zomato and Swiggy.

 

Rapido began its operations in 2015 as a bike-taxi platform. In less than a decade, it managed to bag the second spot in the country’s ride-sharing space. The development comes at a time when Rapido is looking to plan its next phase of growth, after crossing $1 billion in annualised gross merchandise value (GMV).

 

 

The report citing sources also stated, “These are early discussions to determine if Rapido can challenge the Zomato-Swiggy duopoly. The company already offers delivery services for individual restaurants using its two-wheeler fleet.” It further stated that the discussions are still underway and the plans have not been finalised yet.

 

It is worth noting that Rapido on behalf of Swiggy already does food delivery, as the latter is an investor in the ride-sharing startup. Swiggy’s investment in the startup did not come with an exclusivity clause, the report mentioned.

 

Rapido’s presence

Present in 100 cities already, Rapido aims to expand its service to 500 cities across the country by 2025. This comes after the company raised $30 million in February from Prosus, a Dutch investment company. This year's fundraising comes as an extension to the $200 million raised by the startup last year in a funding round led by WestBridge Capital, following which the company's valuation touched $1.1 billion.

 

The report also added that the erstwhile bike taxi platform has seen an uptick in the number of rides booked every day. While in November, it used to clock 2.6 million rides daily, it has now gone up to 3.2-3.5 million rides every day.

 

While Rapido’s ride volumes are still heavily dependent on bike taxis, the number of auto-rickshaws and four-wheeler cabs is fast growing on the platform now, because of the ‘subscription-based model that has been deployed by the firm for gig workers and drivers, who access the platform and its users for a daily or weekly fee instead of paying commission on every ride’.

 

Rapido’s foray into food delivery space 

Rapido’s decision to enter the online food delivery space comes at a time when the segment is facing a slowdown in its growth as the restaurateurs and aggregators argue over the commission rates.

 

The slowdown in the food delivery segment has been attributed to systemic issues, according to a statement from Zomato’s founder Deepinder Goyal.