Rapido enters cab segment to compete with giants like Uber, Ola; Know the cities

Bangalore-based ride-hailing giant Rapido, which battles with Ola and Uber in the bike and auto-rickshaw segment, today announced its entry into the four-wheeler cab-hailing market.

This places Rapido as a direct competitor to established players like Uber, Ola, and BluSmart. The service, named 'Rapido Cabs', has commenced operations in key Indian cities including Delhi, NCR, Bengaluru, and Hyderabad.

What's the business model?

Unlike the typical taxi aggregator model, Rapido said it will differentiate itself with a "lowest price guarantee" and a unique "zero commission" model for its drivers. This means that drivers will pay a minimal software usage fee. 

The startup said that this approach aims to address the issue of commission sharing that has been prevalent in the industry. 

“Our innovative SaaS-based platform revolutionises the conventional commission system for drivers, tackling the persistent challenge of commission sharing with aggregators. This pioneering approach ensures that drivers incur only a minimal software usage fee, marking a significant shift in the industry,” said Pavan Guntupalli, co-founder of Rapido. 

He said the company will also prioritise customers by ensuring the lowest price guarantee and making our services exceptionally affordable.

The stagnant growth of the cab business

“We believe cabs as a category have been stagnant. The number of drivers participating online has also been stagnant for the past four or five years. The root cause, we believe, is that the existing business models and products are not conducive enough for all the drivers to participate on this (online) platform,” stated Guntupalli.

He said that around 20–22 lakh active cabs are running in the country, out of which not more than five lakh are operating on online platforms like Ola, Uber, etc. Furthermore, most of them accept online bookings for daily runs and not weekly, monthly, or yearly assignments.

Integrating CNG-driven vehicles

Apart from geographical expansion, Rapido is also integrating CNG-driven vehicles and plans to transition to an all-electric fleet within seven years. The company said its environmental consciousness aligns with current efforts to electrify its two-wheeler fleet in partnership with companies like Gemopai.

How will it impact the industry?

Rapido aims to revolutionize the cab-hailing industry by attracting current drivers from other platforms and new drivers who have been inactive online. The company's expansion into the cab segment comes amidst its competitors' diversification, with Ola launching 'Ola Parcel' and Uber planning a bus service in Kolkata. 

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