Rapido’s Push into Four-Wheelers: A Game-Changer in the Ride-Hailing Market
Rapido, the leading ride-hailing platform, is set to expand its market share significantly. According to Pavan Guntupalli, one of Rapido’s co-founders, the company aims to reach over 30% of the pan-India market by the end of 2025. This ambitious goal comes after achieving a 20% market share in four-wheelers.
Rapido plans to double its presence across cities in India, moving from 120 cities to 500 by the end of the year. The company has not provided details on which cities it is targeting or how much it plans to invest in this expansion.
According to Equentis, a research firm, Uber dominates the cab category with 50% market share, followed by Ola at 34% and Rapido at 14%. This highlights the significant growth potential for Rapido in the four-wheeler segment.
Rapido is differentiating itself from incumbent players like Uber and Ola by adopting a subscription-based model, known as SaaS (Software as a Service). Unlike the commission-based model of incumbents, Rapido charges its drivers, referred to as captains, a fixed monthly fee to use its platform. Drivers have the option to choose between daily, weekly, or monthly subscriptions.
This subscription model has successfully attracted a new supply of drivers who were previously reluctant to join the ride-hailing economy. According to Rapido, 15% of its driver base comprises individuals new to the sector, drawn in by the subscription model.
Initially introduced with two-wheelers, the subscription model later extended to auto-rickshaws and, more recently, to four-wheelers. The company claims to complete around half a million rides daily across its four-wheeler segment alone.
Ola and Uber declined to comment on the number of cab rides they clock in a day. However, Equentis’ research from December 2024 shows that Uber completed 8,40,000 rides across all categories daily, while Ola does 4,60,000 and Rapido does 3,20,000.
Rapido’s success in four-wheelers hinges on three key pillars: brand positioning, service quality, and safety. The company believes its SaaS model can potentially be the deciding factor in driver satisfaction, given their recurring fee structure. Drivers are trying to figure out a way to provide a better experience to riders to get better ratings and get more orders.
Rapido offers both reactive and proactive measures to ensure rider safety. Riders can share their trip status with contacts, and the company runs a round-the-clock support team. Background checks and police verification are part of the onboarding process.
Rapido’s push into four-wheelers is also a hedge against regulatory uncertainty around two-wheelers. The Karnataka high court ordered a ban on bike taxis unless the state issues specific guidelines. Similar restrictions are under consideration in other states.
Rapido’s latest fundraise was a $30 million investment as part of a Series-E extension round led by Dutch investment firm Prosus. The company’s valuation has grown to $1.1 billion, making it a unicorn.
Rapido’s revenue rose 46.3% year-on-year to ₹648 crore in FY24, according to regulatory files accessed by business intelligence platform Tofler. The ride-aggregator also narrowed its losses from ₹675 crore in FY23 to ₹371 crore in FY24.
In conclusion, Rapido’s push into four-wheelers is a strategic move to capture a significant share of the market and diversify its offerings. With a subscription-based model and proactive safety measures, Rapido aims to provide a better experience for riders and drivers alike.
