Behind Rapido’s flight to keep bike-taxi market supremacy

If you are among the countless IPL fans enjoying the high-octane enjoyment of the cricket competition on JioCinema, opportunities are you have actually seen Rapido’s ‘Bike Wali Taxi Sabse Saxi (bike-taxis are the very best)’ marketing blitz. Among the advertisements includes a girl dumping a terribly crowded bus in favour of the active two-wheeler taxi service that gets here in minutes. The underlying message is clear– bike-taxis are budget friendly, hassle-free and safe.

” However which city are they marketing it for?” asks a senior executive at the bike-taxi vertical of among the leading taxi aggregators, who wants to stay confidential. “In Delhi and Maharashtra, they are prohibited. In Bengaluru and numerous other cities, they are a danger due to the fact that vehicle unions would not let their riders run.”

The advertising campaign has actually been introduced in the middle of a tough time for bike-taxi company, even as they challenge restrictions in crucial markets like Delhi and Maharashtra, and come across considerable functional obstacles in numerous other states, such as Karnataka and Tamil Nadu. “However they do not care,” states the executive. “They will continue to run up until polices appear at their doors. Then they might take a time out, however will resume in no time. That’s been their technique.”


.(* )The guidelines alter in every state … However that does not imply, we have actually been associated with prohibited activity. We are producing lakhs of tasks by virtue of Captains currently owning a bike


Aravind Sanka


Rapido and other ride-hailing platforms have actually been dealing with extreme legal difficulties for over a year now. For example, Karnataka had actually asked the platforms to stop three-wheeler services, implicating them of overcharging and pestering consumers. Individually, Rapido– that likewise has autorickshaws on its platform– was declined a licence to run in Maharashtra. Even Delhi prohibited bike-taxis for breaking the Motor Cars Act, while Madurai city authorities alerted Rapido riders of rigorous action.

Plainly, the fight isn’t practically Rapido. The entire bike-taxi market– where policies differ by city and state– is affected. While some states such as Goa and Haryana have actually legalised bike-taxis, in other areas, they mostly run in a legal grey location. Significant gamers such as Rapido, Uber Moto and Ola Bike have actually struggled to browse this unsure surface, with regular altercations with autorickshaw unions and federal government companies.

” They

have actually acquired considerable market share over the other 2 [Rapido] by running their operations when others close down to adhere to federal government policies,” states a previous senior executive at Uber, wanting to stay confidential.[Ola and Uber] It’s clear that start-ups frequently utilize regulative obscurity to interfere with standard markets. Initially, they develop themselves as market disruptors by providing benefit and much better prices; then they lobby for regulative modifications to legitimise their operations. Rapido has actually been driving such a disturbance for bike-taxis in India. Today, their story– comparable to how Uber’s cab-hailing company browsed the preliminary legal obstacles it dealt with in India for not adhering to regional laws, however whose hassle-free services triggered a public argument on the requirement for regulative modifications that required the federal government’s hand to develop standards for the operation of ride-hailing business– is basically establishing along the very same lines.

” Travel and transportation belongs of the Concurrent List. So, the guidelines for it alter in every state and union area. However that does not imply we have actually been associated with prohibited activity. After all, we are producing lakhs of tasks by virtue of them

currently owning bikes,” states Aravind Sanka, Creator of Rapido.[riders, called Captains] Based on unproven price quotes, Rapido presently takes pleasure in a 65 percent market share in India’s fledgeling bike-taxi market, and it didn’t reach there simply by evading the numerous regulative bullets.



Bike cabs …(* )budget friendly, hassle-free and safe. We were persuaded about business from the first day. We understood it is going to be a multi-billion-dollar chance in the long term

.[are] Kunal Khattar

Establishing Partner,

AdvantEdge Creators(* ) .
Given that its launch in 2015, Rapido has actually had a consistent however prudent journey. The business was so undercapitalised that it picked not to broaden beyond Bengaluru in the very first 3 years of its presence. Throughout that time, it produced awareness, constructed its item, enhanced consumer experience and developed a classification. Its very first big round– of Rs 52 crore in Series A financing– was available in its 4th year. This prudent frame of mind has actually assisted it make it through even as lots of peers have actually ended up in between 2015 and 2018.
” Bike-taxi is the only choice that offers all the 3 functions that individuals search for in public transportation– price, benefit and security,” states Kunal Khattar, Establishing Partner at AdvantEdge Creators, which is an early financier in Rapido. “We were persuaded about business from the first day. We understood it is going to be a multibillion-dollar chance in the long term. We simply wished to ensure we back the ideal group.”

Khattar’s financial investment mantra may be on point with his concentrate on price and benefit, however security stays a deep issue. Plus, there’s the cultural element, particularly for ladies commuters. To start with, two-wheelers are viewed as less safe than their 3- and four-wheeler equivalents. Then comes the doubt amongst ladies in riding pillion with a complete stranger due to its strangeness and security issues. Contributing to this obstacle is the glaring absence of female riders. For example, on Rapido, there are presently just around 200-300 female Captains out of over 1.1 million signed up Captains. The business prepares to increase their numbers to 1,000 within the next 6 months.

” I do not choose bike-taxis due to the fact that it’s strange sitting behind a random guy. The distance is too close and it appears risky,” states Sneha Sharma, a regular Rapido autorickshaw user. “I ‘d rather take an autorickshaw and sit alone behind, where I am at a safe range.”

Nevertheless, Rapido’s creators– mentioning the 22 percent ladies commuters on the platform– firmly insist that insurance coverage and a watchful tech system have actually made bike-taxis similarly safe for ladies.

Regardless of these obstacles, professionals state Rapido’s strength remains in its active advancement and single-product focus.

Khattar, who initially backed Rapido in its 2nd seed round in 2016, states the business’s single-product focus has actually assisted them beat the chances. “There were numerous conversations at the board consisting of entering into food shipment or ending up being an extremely app; all of them have actually been shot down. Of the 120 cities, they do not have a physical existence in about 100. They handle and keep track of operations from another location from Bengaluru. That is how they constructed a really expense- and capital-efficient company design,” he states. “That is what has actually permitted them to end up being a clear market leader.”

On the other end, Ola and Uber– that have actually raised and invested billions of VC dollars to develop their particular organizations around big-ticket items– provide a typical flight cost of about Rs 300. On the other hand, Rapido is custom-made for the bike-taxi sector, which is a small-ticket company. In its 8 years, the business has actually raised a portion of its rivals’ financing, with its biggest round of $180 million being available in April 2022.



As soon as you produce a circuit of bicycle riders, you can produce a membership design. I feel these services will boil down to this design, where motorists will pay a regular monthly membership to utilize the app


Ashutosh Johri



” They
are the Mercedes of shared movement. For them to provide a 50-60-product, successfully, is difficult. When you are over-capitalised, you toss cash at every issue, which is what is occurring with subsidised flights and heavy customer-acquisition expenses. For that reason, it is really hard for them to end up being capital mindful,” states a VC financier who has actually made bets on the movement area, and who wants to stay confidential.

On the other hand, Rapido’s supremacy in the bike-taxi area is indisputable, with it being the foundation of its whole company. This is specifically why they can’t pay for to stop operations. Nevertheless, as the need for hassle-free and budget friendly transport continues to increase, the bike-taxi market is ripe for the selecting. With 3 gamers– Rapido, Ola and Uber– in the race, it’s clear that everybody comprehends the enormous capacity of this progressing sector.

Ashutosh Johri, Co-founder of now-defunct bike-taxi company Baxi, states the winner will be the one that produces the greatest supply network. And he thinks that the commission-based design might not be the most ideal and sustainable one for bike-taxis. “If you attempt to take a cut on every flight, it is not a legitimate design. The reason that they [Ola, Uber] are making it through is due to the fact that they are offering rewards. That’s the factor they are not generating income too,” he states. “As soon as you produce a mega circuit of bicycle riders, you can produce a membership design for them. I feel these services will eventually boil down to this design, where the motorist will pay a regular monthly membership to utilize the app.”

While this kind of design has actually not been try out, it might possibly provide a much better offer to the riders and incentivise more riders to register on the platforms. Commuters would likewise stand to acquire as in the cities, where most journeys are brief and solo, two-wheelers provide a quick and budget friendly service– particularly for the more youthful crowd– who prioritise affordable travel choices. Likewise, they fix the very first- and last-mile obstacle, while preserving a consistent stream of commuters for the riders.

However not too long back, the pandemic had actually struck the city movement market hard, resulting in a sharp decrease in the variety of taxis on the roadways. And now, taxis have actually ended up being progressively unaffordable and undependable. Take the example of Bengaluru where, when flourishing, the variety of taxis on the city’s roadways has actually diminished to 35,000-40,000 automobiles, from 100,000-125,000 in 2018, states Tanveer Pasha, President of Ola-Uber Taxi Drivers’ Association. As an outcome, service levels have actually sunk to an all-time low.[aggregators] And while autorickshaws act as the most budget friendly transport choice, they stand to lose the most, must bike-taxis get regulative approval. Per Pasha, the development of bike-taxis has actually triggered a decrease of around 40 percent in the earnings of autorickshaw motorists, however they are now beginning to recuperate a few of their lost incomes due to a decrease in the variety of taxis.

On the other hand, commuters throughout cities are trying to find budget friendly and effective transport choices that cover the very first- and last-mile commute. With many docked and rental bike start-ups like Bounce, Vogo and Ontrack having actually rotated or shut store, the bike-taxi market is large open for the consistent gamer to catch. And while ride-sharing platforms saw a depression throughout the Covid-19 pandemic, as lockdowns ended and taxis didn’t return on roadways, bike-taxis have actually handled to capitalise on it.

” The

market has actually truly seen approval for many years. It was rather little till CY19, and de-grew in 2020, however given that in 2015, development has actually been extraordinary. If you compare CY20 with CY22, bike-taxi flights have actually grown 2.5 to 3x,” states Ujjwal Chaudhry, Partner at RedSeer Management Consulting.


. [bike-taxi] The

market was rather little till CY19, and de-grew in 2020, however given that in 2015, development has actually been extraordinary. If you compare CY20 with CY22, bike-taxi flights have actually grown 2.5 to 3 times


Ujjwal Chaudhry[bike-taxi] Partner

RedSeer Management Consulting


In all this, Rapido’s vision is clear: do not let the empty rear seats of a bike go to lose, when it can be an income source. “It’s cost-effective and eco-friendly,” states Sanka. And this concentrate on effectiveness does not stop at transporting individuals around the city. The ride-sharing platform has actually broadened its services to consist of food and carrier shipments, a location where rivals Uber and Ola have yet to make any considerable inroads. It has actually partnered with Swiggy– that is a financier in the business– and Amazon and JioMart, to enable its fleet of Captains to change equipments and end up being shipment representatives, whenever the requirement develops. From transporting office-goers and university student in the early morning and night, to satisfying lunch and dinner-time food shipments, to dealing with e-commerce deliveries in the slower afternoon hours, Captains on the platform have the choice to remain hectic all day.
” A bulk of its

Captains work part-time. Without food shipment and bike-taxi being complementary, they will not make adequate cash as a full-time rider. The tactical collaboration with Swiggy has actually truly assisted them. Rapido is the just one with tight combination with food and e-commerce gamers,” states a previous bike-taxi creator who wants to stay confidential. “It’s an outstanding company. There is no set expense, no consumer acquisition invests. It is their greatest rival moat today.”

Rapido is aiming to improve the effectiveness of its fleet. Per sources that BT talked to, the business is thinking about transitioning its fleet from standard internal combustion engine (ICE) automobiles to electrical two-wheelers. This would line up with brand-new policies in Delhi, where the federal government is apparently thinking about enabling just electrical two-wheelers for bike-taxis. Moving to electrical automobiles would likewise lead to expense savings for everybody included.

” Rapido has about half a million signed up Captains and understands which automobile they utilize and how old they are. Presuming that an individual keeps his bike for 5 years, 20 percent of the Captains on the platform will purchase a brand-new bike every year. That’s 100,000 bikes. Today they all purchase ICE automobiles. Rapido is attempting to affect that choice,” states a market expert familiar with the strategies.[Rapido’s] Rapido will serve as an intermediary that unites EV makers, investors and insurance coverage companies to assist its fleet shift to EVs. Provided the magnitude of the requirement, the business is seeing considerable interest from gamers ready to provide the platform a commission.

Regardless of the regulative vacuum, Rapido has actually consolidated TVS for supply of electrical 2- and three-wheelers. Apart from this, it has actually likewise consolidated RACEnergy– a battery switching network company– to release e-autos supported by RACEnergy’s network, in Hyderabad.

In the middle of the progressing landscape of the bike-taxi market, business designs these days will see numerous versions prior to the platforms discover firm ground. Nevertheless, one indisputable reality stays– the large benefit and economics of this design is sustaining its need. And in the middle of everything, Rapido has not just became the winner, however likewise the supreme game-changer rewording the guidelines of engagement.


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