Rapido's disruptive ride

Rapido, the new kid on the cab aggregator block, is shaking up the market — and its far bigger rivals — with its new playbook. Its financial model may be based on slim margins but that’s not something that worries Rapido

- SURAJEET DAS GUPTA

Uber Inc's global Chief Executive Officer (CEO) Dara Khosrowshahi does not see Ola Cabs-with which it has been in a head-tohead battle for years in India-as its main rival in the mobility business anymore, saying it is now a distant number three.

In a podcast interview in August, he called its new rival an upstart that had aggressively gone into the market but with a simple business model, which maximised driver-income and grabbed the market share.

The new kid on the block is none other than Bengaluru-based startup Rapido, which, in the last 20 months, has disrupted India's mobility business.

The prevailing model, which has stood for years, had driverpartners forking out 20-25 per cent of their trip earnings to the mobility company as commission for being on their platform.

Rapido offered an alternative - first to its auto drivers in February 2024 and then its cab driver nine months ago. They join by paying a subscription of an average ₹20-25 a day and only if they accept rides. The various subscription models effectively translate to 5 per cent of their ride income. With zero commission, drivers' take-home incomes get a boost. However, for bike-taxi drivers who are mostly parttimers using the platform for a few hours a day or just some days a month, Raipdo says the commission model offers more flexibility.

The gamble has forced rivals to follow suit. Just a few weeks ago, Uber said it was rolling out a nationwide subscription-based model for its drivers across cars, autos, and bikes. Ola Electric, too, has shifted to a similar model across categories.