Dark Horse to Disruptor

Rapido has broken the Uber-Ola duopoly in ride hailing by flipping the typical go-to-market script of consumer-tech in India. Now it is foraying into food delivery

- Nabodita Ganguly

For over a decade, India’s startup ecosystem followed a familiar formula.

First pilot your service in a metro. When the platform sees the first rushes of growth, raise funds to expand to other cities. Once there is substantial scale in the top-10 cities, look towards the hinterland.

Rapido’s founders saw a flaw in that playbook. It was just too costly. Moreover, they realised that in a country of 1.4bn people, existing players were catering only to the top 10-20mn users, leaving the next 100-500mn without a choice. When another co-founder Pavan Guntupalli was without a job, he felt the problem of mobility firsthand. There was no convenient and affordable commuting option.

Without any blue-chip backers and little capital in hand, Rapido had to do things differently. In 2015, it started with bike taxis, not cars, and focused on smaller cities.

“We launched in Mysuru and Vijayawada before even considering Delhi or Chennai. We focused on finding ways for them [drivers] to earn more through consistent demand,” says Aravind Sanka, co-founder, Rapido.

When Risk Paid Off

Meanwhile, Mysuru, with its narrow roads and modest commuters, became a laboratory. From there, Rapido validated its model and scaled it across small and mid-sized cities which investors had dismissed as too fragmented to matter. Ola and Uber were already dominating metros, and few saw sense in competing for smaller towns.

Even when it had a breakthrough moment in Delhi in 2016 as the state government introduced the odd-even scheme to curb pollution levels, it capitalised on the opportunity to gain a foothold first in nearby cities like Bareilly, Meerut, Saharanpur, Moradabad and Aligarh. Today, 40% of Rapido’s revenues come from Tier-II and Tier-III cities.