Rapido's Story
Rapido's story is about not giving up. It began after another business idea failed. The founders used what they learned to solve a big problem they saw every day: traffic jams in Indian cities.
A New Idea from a Failed Business
Before Rapido, the founders started a delivery company called "theKarrier" in 2014. It used mini-trucks to deliver goods. But the business struggled because many truck drivers were not used to using technology. This made it hard to grow.
The idea for Rapido came from their own frustration with traffic. They realized that bikes were the fastest way to get around crowded cities. So, they decided to switch from a delivery business for trucks to a ride-sharing service for people on bikes. This was a smart move because it solved a problem that millions of people faced every day.
They launched a very simple version of the Rapido app in Bangalore in 2015. It had just the basic features: one app for riders (called "Captains") and one for customers. It showed clear prices and had safety features like helmets and background checks for riders.
This simple start helped them learn what customers wanted without spending too much money.
Testing the Big Idea
Rapido started small to test its main idea. The biggest question was: Would people feel safe riding on a bike with a stranger?
A Simple App to Get Started
They launched a very simple version of the Rapido app in Bangalore in 2015. It had just the basic features: one app for riders (called "Captains") and one for customers. It showed clear prices and had safety features like helmets and background checks for riders.
This simple start helped them learn what customers wanted without spending too much money.
100,000+
Rides in the first 4 months
85%
Happy, returning customers
People loved it! The app quickly became popular, and many customers used it again and again. This proved that there was a huge need for a cheap and fast way to travel in cities.
Getting the Money to Grow
Rapido needed money to grow. At first, many investors said no. But after proving the idea worked, they raised money from big companies and became a unicorn.
Funding Raised Over the Years ($ Million)
A Tough Start: The founders were rejected 75 times before getting their first investment. An early investment from the chairman of Hero MotoCorp gave them a big boost.
Smart Money: In 2022, Swiggy invested $180 million. This was a smart move, as it created a strong partnership between two major delivery and transport companies.
Major Shareholding Pattern (Estimated)
The chart illustrates the ownership structure, highlighting the significant stakes held by founders, key venture partners, and strategic corporate investors who have fueled Rapido's growth.
How Rapido Grew So Fast
After seeing that people liked the idea, Rapido used a smart plan to grow quickly. They focused on smaller cities and created a fair system for their drivers.
Focusing on Smaller Cities
Instead of competing with big companies like Ola and Uber in major cities, Rapido went to smaller Tier-2 and Tier-3 cities. These cities had many bike owners but not enough public transport. This was a clever move because Rapido became the main choice for travel in these places without a big fight.
A Fair Model for Drivers
Rapido changed how drivers get paid. Instead of taking a large cut from every ride, they offered drivers a subscription plan. Drivers could pay a small daily or monthly fee and keep almost all the money they earned. This made drivers happy and loyal, which meant more bikes were available for customers at lower prices.
Adding New Services Over Time
2015: Bike Taxi
The first service, offering fast and cheap bike rides.
2020: Delivery & Auto-Rickshaws
Started delivering packages and added auto-rickshaws to the app.
2023: Cabs
Began offering car rides to compete directly with Ola and Uber.
2025: Food Delivery
Planned to start a food delivery service with low fees for restaurants.
The Core Disruption: Subscription vs. Commission
Rapido's masterstroke was abandoning the industry-standard commission model. Instead of taking a 20-30% cut from every ride, they introduced a small daily subscription fee, fundamentally changing the economics for drivers.
The Old Way: Commission Model
Platforms like Ola and Uber take a large percentage of every fare, reducing driver take-home pay and creating friction.
Customer Pays ₹100
Platform Takes ~₹25 (25%)
Driver Earns ~₹75
The Rapido Way: SaaS Model
Drivers pay a nominal daily fee (e.g., ₹9-₹29) and keep 100% of all fares, leading to higher, more predictable earnings.
Customer Pays ₹100
Platform Takes ₹0 Commission
Driver Earns ₹100
The Rapido Flywheel: A Virtuous Cycle
Rapido
The SaaS model is a strategic masterstroke that weaponizes driver satisfaction. By prioritizing driver earnings, it cultivates a dense and loyal driver network. This superior supply translates directly into better service and lower prices for customers, fueling a self-sustaining cycle of growth.
The Mobility Battlefield
This driver-centric model has enabled Rapido to aggressively capture market share from the long-standing Ola-Uber duopoly across all major vehicle segments.
The Incumbent's Dilemma
Legacy Commission Model
High-margin but causes driver friction and limits mass-market appeal.
New Subscription Model
Defends market share but is low-margin and risks cannibalizing core profits.
The competitive pressure has forced Ola and Uber into a strategic bind. They must now manage two conflicting business models, creating operational complexity—a problem Rapido, built on the SaaS model, does not face.
A Look at the Numbers
Rapido has earned a lot more money over the years while also working hard to reduce its losses and become profitable.
Revenue vs. Loss (in ₹ Crore)
Where the Money Came From (FY24)
4.4x
Revenue Growth
(FY22-FY24)
45%
Less Loss
(FY23-FY24)
3.6M
Rides Every Day
75M+
Total Happy Customers
Can Rapido replicate Magicpin Success?
While ONDC is supposed to be open and decentralized, one company, Magicpin, has found a way to become the king of food delivery on the network.
Magicpin's Smart 3-in-1 Strategy
Magicpin realized that sellers need an easy, all-in-one solution. So, it became three things at once:
A Seller App:
It signed up over 70,000 restaurants, giving them an easy way to get on ONDC.
A Logistics Manager:
It created "Velocity," a system that finds the best delivery person for every order, making delivery reliable.
A Buyer App:
Its own popular app brings in lots of customers, completing the circle.
90%
of food orders from other big apps like Paytm are actually handled by Magicpin's system in the background!
The New Frontier: Disrupting Food Delivery
Rapido is now applying its low-cost playbook to food delivery, challenging the high-commission model of Zomato and Swiggy with a low, flat-fee structure for restaurants.
Execution Risks & The Swiggy Paradox
The food delivery market requires massive capital for customer acquisition and building a restaurant network, which is far more complex than onboarding drivers. The challenge is compounded by the "Swiggy Paradox": Swiggy is both a direct competitor and a major investor in Rapido, creating a unique and complex strategic dynamic.
Let's Understand ONDC First
First, ONDC is not an app you can download. Think of it as a set of rules, like a language that all online shopping apps can use to talk to each other. The goal is to break down the "walls" around big shopping platforms like Amazon or Flipkart.
How It Works: Breaking Down the Shopping Mall
On a normal shopping app, one company controls everything: the search, the payment, and the delivery. ONDC changes this. It uses a system called the Beckn Protocol to "unbundle" or break down these jobs into separate pieces. This means different companies can handle different parts of your order. It's like an open shopping mall where any store can set up shop and use any delivery service they want. This gives sellers more freedom and buyers more choice.
The Main Players in the ONDC Mall
Buyer Apps
These are the apps you use to shop, like Paytm. They show you products from all sellers on the ONDC network.
Seller Apps
These are the tools that stores use to put their products online, like Magicpin. They help sellers manage their items and orders.
Logistics Providers
These are the delivery companies, like Dunzo or Shadowfax. They pick up your order and bring it to you.
Gateways
These are like traffic controllers. When you search for something, they send your request to all the right sellers.
ONDC's Amazing Growth
How Many Orders? A Lot!
ONDC is growing super fast. It went from just a few orders to over 10 million orders in a single month by June 2024! The chart below shows this journey. At first, most orders were for rides (like autos), but now, shopping for items (retail) has taken the lead. You can click the buttons to see the different types of orders.
More Sellers, More Cities
ONDC isn't just growing in orders; it's also adding more sellers and cities every day. By 2025, over 760,000 sellers had joined, and most of them are small businesses. This shows ONDC is helping the "little guy" get online.
| Date | Sellers | Cities |
|---|---|---|
| Apr 2022 | - | 5 (Just starting) |
| May 2024 | 535,000+ | 1,200+ |
| Jun 2025 | 764,000+ | 616+ |
The Good and The Bad
Like any big new idea, ONDC has had amazing successes and some serious problems. Let's look at both sides.
The Good Parts ✅
- Helping Small Shops: It has helped over 760,000 small sellers get online and find new customers from all over India.
- Great for Simple Services: For things like booking an auto ride, ONDC works perfectly because the service is simple and the same every time.
- Cheaper Prices: Because ONDC takes a very small fee, things like food are often much cheaper for customers.
The Bad Parts ❌
- Confusing to Use: Many users find the apps hard to use. Sometimes offers are wrong or store locations are incorrect.
- Bad Customer Service: If an order goes wrong, it's hard to know who to call. The buyer app, the seller, and the delivery person might all blame each other.
- Losing Steam in Shopping: After the big discounts stopped, fewer people are using ONDC for regular shopping because the experience isn't as smooth as on other apps.
ONDC vs. Other Apps
So, how is using ONDC different from using an app like Amazon, Flipkart, Zomato, or Swiggy? The main difference is who is in control. This table makes it easy to understand.
| Feature | ONDC | Zomato / Swiggy | Amazon / Flipkart |
|---|---|---|---|
| What is it? | An open network (like a public road) | A closed platform (like a private mall) | A closed platform (like a private mall) |
| Who is in control? | No single company. It's run by a non-profit. | Zomato or Swiggy controls everything. | Amazon or Flipkart controls everything. |
| Cost for Sellers | Very Low (2-4% fee) | High (25-30% fee) | High (Varies, but can be 15-40%) |
| Customer Experience | Can be confusing, service can be unreliable. | Smooth and reliable, with good support. | Smooth and reliable, with good support. |
| Prices for You | Usually Cheaper | More Expensive | Competitive, but includes platform fees. |
| Best For | Saving money, finding local sellers. | Convenience and reliable food delivery. | Huge selection and fast, reliable shopping. |
The Food Fight!
Food delivery is where ONDC is making the biggest splash. It's challenging big players like Zomato and Swiggy with a simple weapon: price.
The Big Question: Cheaper Food or Better Service?
The Great Deal
Food on ONDC can be 20% to 60% cheaper! This is because ONDC charges restaurants a very small fee (2-4%) compared to Zomato/Swiggy (25-30%).
The Big Risk
The low price can come with problems: wrong orders, late deliveries, and terrible customer support when you need a refund.
Is It Working?
Yes! Despite the problems, the low prices are attracting customers. In a big city like Bengaluru, ONDC already has 18% of the food delivery market.
Challenges on the Road Ahead
Despite its success, Rapido's path forward is not without obstacles. The company must navigate a complex landscape of regulatory issues, fierce competition, and the daunting challenges of scaling.
The Regulatory Maze
The ambiguous legal status of bike taxis remains the single greatest threat. State-level bans and inconsistent regulations create significant operational instability. While new central guidelines offer a path to legalization, the state-by-state implementation will be a long and complex process.
Intense Competition & Capital Burn
Incumbents are now mimicking the subscription model, and the food delivery space is a high-cash-burn warzone. Scaling new verticals requires massive investment, which could threaten the company's hard-won progress toward profitability.
Driver Welfare & Sustainability
While the SaaS model improves earnings predictability, some critics argue that low fares can still pressure driver income. Broader gig economy issues like job security and social benefits remain systemic challenges that a business model alone cannot solve.
States Are Making Their Own Rules
Because the national law is slow to start, states like Rajasthan, Telangana, and Karnataka are making their own laws. This creates a confusing mix of different rules for companies that work all over India. These state laws often cover more than just benefits.
How Bike Taxis Are Affected
Confusing Rule Changes
The bike taxi industry has faced sudden and confusing rule changes, going from being banned in some places to being allowed nationally.
-
1. Bike taxis operate in a legal "grey area"
-
2. Some states suddenly ban them (like in Karnataka)
-
3. National government makes them legal with new rules
New National Rules for Bike Taxis
The new Motor Vehicle Aggregator Guidelines for 2025 finally create a clear national framework, but they also add new rules for companies.
Rules on Fares
Companies can charge higher "surge" prices during busy times, but the price can't be more than twice the base fare. This might make rides more expensive for customers.
Required Driver Benefits
Companies must now provide drivers with health insurance of at least ₹5 lakh and life insurance of at least ₹10 lakh.
The Tough Cycle of App Economics
App companies are stuck in a difficult cycle. They face pressure from investors, which leads to them cutting costs, which then leads to new rules that add more costs.
Who Pays for These New Rules?
The new benefit rules will cost a lot of money. This model shows how a new fee could affect a large app company with ₹10,000 Crore in revenue.
💡 Move the slider to see how different contribution rates affect company profits
