Swiggy-backed bike taxi startup Rapido is aiming to achieve 15-20% of its total revenue through cab services by 2025, says the company’s co-founder Pavan Guntupalli.
Rapido, which was founded in 2015, announced its entry into the cab market through a SaaS-based (software-as-a-service) platform on Tuesday. The company has initially launched a fleet of 1-1.5 lakh vehicles across Delhi-NCR, Hyderabad, and Chennai. The company plans to introduce Rapido Cabs to other major cities by mid-2024. The company already has bikes and autos as part of its offerings.
“By mid-next year, we will be expanding across the country and we will be coming up with different products that are more suitable for the cab driver in those cities,” says Guntupalli.
Through its cab services, the bike taxi service provider will also compete with other cab aggregators such as Ola, Uber, and InDrive among others. Unlike its peers, however, the TVS-backed company has not partnered with original equipment manufacturers (OEMs) to procure vehicles. The company has instead partnered directly with individual cab providers.
“We believe cabs as a category has been stagnant. The number of drivers that are participating on this platform has been stagnant and has been stagnant for the past four to five years. The reason we believe this is because the existing business models and the existing products are not conducive enough for all the drivers to participate on this platform. Around 20-22 lakh active cabs are currently plying on the road. Out of which, not even five lakh cabs are operating on all these platforms. And even if they are operating, they are operating daily,” says Guntupalli.
According to the company, Rapido Cabs will work on a zero-commission model for the cab drivers. Through this model, the cab drivers will have a minimal subscription fee of ₹500 on reaching a monthly earnings of ₹10,000.
Notably, Rapido, which currently commands a 60% market share in bike taxi services, is not planning to raise funds in order to sustain its cab services business. “We are already operationally profitable and pretty soon we are going to be EBITDA profitable as a company. Rapido Cabs is going to be a profitable business model itself, or starting with the breakeven business model where we don’t charge as well as don’t burn, and when we get our subscription rates right, it is going to be a profitable model. So we won’t be looking once at raising funds atleast to sustain our cabs business,” says Guntupalli.
The company has launched its petrol-based cab services at a time when most of its peers have already forayed into the electric mobility segment. Rapido, however, is not rushing towards including electric vehicles as part of its fleet. It is rather trying to understand the hurdles in electrification be it in terms of financing, charging infrastructure or pricing by collaborating with the government, according to Guntupalli.
“Most of our bikes are petrol-driven bikes. We are constantly electrifying our fleet. We have partnered with multiple EV providers and trying to electrify our existing fleet, and we are going to follow the same partnership approach even in the National Capital Region,” says Guntupalli.