Welcome to this week’s edition of TOPICAL WEDNESAY! Today, we’re diving into how Rapido has shaken up the traditional cab aggregator model dominated by Ola and Uber and how they’re now gearing up to replicate that same disruptive playbook in the food delivery space.
Get ready to explore how a nimble, two-wheeled underdog is taking on the giants, first on the streets, and now at your doorstep.
Every once in a while, a new player enters an industry and completely reshapes the way business has been done for years. Think of how Zerodha transformed the broking industry, or how Jio disrupted the telecom space.
In a similar fashion, today we’re going to talk about Rapido, the game-changer that’s rewriting the rules for cab aggregators.
Founded in 2015 by three curious and smart engineers, Aravind Sanka, Pavan Guntupalli, and Rishikesh SR, Rapido began with a simple idea: turn the everyday two-wheeler into an affordable taxi for one. What started as an experiment in urban mobility has since evolved into one of India’s fastest-growing ride aggregators, particularly in tier-1 and tier-2 cities, where affordability and accessibility matter most. Today, Rapido isn’t just a brand; in many parts of India, it’s become the default word for bike taxis, much like how “Xerox” became shorthand for photocopying. That’s a rare situation, known in branding as genericide, which also signals deep cultural adoption.
As of 2025, Rapido’s scale-up has been nothing short of remarkable:
- It jumped from 1.5 crore total users in 2020 to over 7.5 crore in 2025.
- Monthly active users surged to 3.2 crore in 2025
- Daily order volumes run in the millions.
- Gross merchandise value (GMV) has crossed $1 billion (Rs. 8500 Cr).
- And it’s operating at a revenue run-rate nearing Rs. 1,000 Cr.
This reflects an estimated CAGR of ~50% from 2020 to 2025, far outpacing most rivals in India’s crowded mobility space.
Business Model
Rapido operates as a digital aggregator, serving as the connecting layer between general public looking for a ride and nearby driver-partners. It doesn’t own vehicles or directly employ drivers. Instead, it provides a technology platform, mainly a mobile app, that facilitates this connection.
We all know it works: a customer opens the app, books a ride, and is matched in real-time with a nearby driver-partner, whom Rapido refers to as a “Captain”. The app handles everything, from location tracking and fare estimation to digital payments and customer support.
The drivers operate independently, choosing when and where to work. Rapido enables them to earn through its platform while maintaining flexibility. On the customer side, the experience is seamless: quick bookings, live tracking, and in-app payments.
This asset-light model allows Rapido to scale efficiently across geographies without owning fleets or managing physical infrastructure. Its value lies in managing the entire ride experience digitally, building trust with both sides of the platform, and ensuring smooth coordination from booking to drop-off.
By playing the role of a digital matchmaker, Rapido simplifies mobility for everyday users while creating sustainable earning opportunities for thousands of Captains across the country.
Rapido works on SaaS, which is an abbreviation for Software-as-a-Service, a term commonly used in the world of tech startups and cloud software. It is a simple idea: instead of buying expensive software upfront, users just pay a monthly subscription fee to access it over the internet. No bulky installs, no big commitments.
Now this is exactly what Rapido did, to a totally different industry: the Cab aggregation business.
While big names like Ola and Uber continued to take a fat commission on every ride (often 25–30%), Rapido flipped the model on its head. Instead of nearly robbing the drivers, Rapido now charges a flat subscription fee for accessing its app (for cabs).
But here’s the clever part: the subscription fees only kick in after a driver earns at least Rs 10,000 worth of rides in a month. So, if business is slow, they don’t have to pay anything. But if they cross that threshold, a single monthly payment unlocks unlimited rides, which means no commissions, no surprises.
In essence, Rapido took a model that’s worked wonders in software and reshaped it for the gig economy. It’s a rare win-win situation and better unit economics for Rapido, which additionally also provides a fairer deal for the people who keep its platform running, “Captains”.
By replacing the traditional per-ride commission with a simple subscription fee, Rapido catered for a long-standing pain point for drivers, unpredictable and often high deductions from their fare prices. The move not only made the platform more attractive to driver-partners but also forced the industry to take a note.
The impact has been significant enough that Ola, one of the largest players in the space, recently moved away from its commission-based structure and adopted a subscription model of its own. What began as Rapido’s bold experiment has now influenced broader industry economics, which has resulted in proving that innovative pricing, when grounded in driver needs, can reshape market dynamics and disrupt the giant competitors.
After shaking things up with its flat-fee model for taxi drivers, Rapido has now extended the same playbook to auto-rickshaw drivers, a segment that forms the backbone of urban and semi-urban mobility in India. Rapido introduced a low-cost daily subscription plan, where drivers pay a fixed fee that generally lies between Rs 9 – 29 per day, depending on the city. Once subscribed, they retain 100% of their fare earnings, without worrying about per-ride deductions.
It’s a small amount for predictable income. And for many auto drivers living day to day, that predictability matters more than anything.
The shift from commission-based to subscription-based model has enhanced Rapido’s attractiveness by three factors:
(Source: Bastion Research)
Here is a table comparing the economics of different taxi aggregators in India with Rapido. To keep things simple and consistent, we’ve assumed a driver earns Rs. 10,000 in gross revenue over 25 working days in a month. The table below breaks down how much is actually left with each platform’s pricing model.
(Source: Company, Bastion Research)
Rapido’s Payment Model
Beyond its subscription model, Rapido manages driver payments through an in-app digital wallet system designed to ensure transparency and liquidity for its Captains.
Each Captain has access to a Rapido Wallet within their app. When a customer pays for a ride online through the Rapido platform, the payment, after deducting commission (if any), is credited directly to the Captain’s wallet. If the fare is paid in cash to the driver, Rapido later deducts its commission (if applicable) from the same wallet balance.
Captains can withdraw funds from their Rapido Wallet up to three times a week, allowing for consistent cash flow which is a critical factor for gig workers managing daily expenses.
Importantly, for drivers enrolled under Rapido’s subscription model, the Company does not intervene in fare collection. The Captain receives payments directly from the customer, and no commission is deducted. This structure not only supports better earnings visibility but also strengthens Rapido’s positioning as a more equitable platform for driver-partners.
Entry into a new segment? Will Rapido be able to disrupt food aggregators like Cab aggregators?
Food delivery has become part of daily life in India’s urban and semi-urban pockets. Whether it is a weekend party or a midweek escape from cooking, most of us are regular users. The space, as we all know, is clearly dominated by two players: Swiggy and Zomato. Their apps are installed on millions of phones, and for many, they’re used at least once a month – if not every week.
From a business perspective, the model is heavily commission-based. Most delivery apps charge restaurant partners a commission of 20–30% on every order. While this may seem manageable at first glance, it eats into the already thin margins that food outlets operate with. For many small and mid-sized restaurants, these commissions make online delivery unviable in the long run.
Further, to cover this cost, restaurants inflate menu prices on these platforms, resulting in higher prices for consumers compared to in-store dining.
Over time, several restaurants have pulled back from delivery platforms because the economics simply don’t add up. After paying commissions, discounts, packaging, and taxes, there’s often very little left on the table, which makes it harder for outlets to stay profitable or to reinvest in quality and service.
What was once seen as a growth channel is now being questioned for its sustainability. And in a price-sensitive market like India, where affordability is key, the huge commissions are eroding the small and mid-size restaurant owners.
(Source: The Indian Express)
Target Markets and Customers: Who Buys Refurbished Devices?
Now, Rapido is preparing to enter this market, and it will not be starting from scratch. With a vast fleet of two-wheeler riders already on the ground, known as Captains, the Company is well-positioned to horizontally integrate into the food delivery business.
But what makes this move really interesting isn’t just the entry itself, but also the structure the Company is likely to bring in. By applying its proven subscription-based model, the Company aims to create a rare Win-Win-Win-Win scenario:
(Source: Bastion Research)
By introducing its Flat-Fee model, Rapido stands to attract a wave of restaurant partners who have suffered from high commissions by existing delivery platforms. This move reflects the Company’s broader approach using innovation and execution to disrupt commission-heavy models, just as it did in mobility. With the infrastructure in place and lessons learned from its ride-hailing business, Rapido’s entry into food delivery could once again challenge the existing GIANTS. However, the final results will be based on the execution by the Company. Only time can answer the question: “Will Rapido be able to disrupt food aggregators like Cab aggregators?”
On a side note, interestingly, Swiggy is an investor in Rapido.
Our Closing Thoughts
Rapido has demonstrated that even in a market dominated by a giant duopoly, a new idea, backed by sharp execution and timely innovation, can meaningfully disrupt well-established players.
With limited capital but a clear focus, Rapido didn’t just enter the ride-hailing space. it reshaped it. By building a business model that serves the needs of India’s price-sensitive and underserved mobility markets, the Company created a rare WIN-WIN-WIN:
- A win for its Captains, who benefit from predictable, commission-free earnings through its subscription model.
- A win for the general public, who now have access to affordable, reliable transportation in big as well as small cities.
- And a win for Rapido as a corporate entity, which has built a scalable platform with strong unit economics and growing user engagement.
Looking ahead, Rapido’s plan to enter the food delivery space could be another step forward. It has the potential to unlock an additional income stream for Captains while improving overall platform utilization, especially during off-peak ride hours.
For the Company that started by asking, “Why can’t we use bikes as taxis?” Rapido has quietly rewritten the rules of aggregation. Its ability to penetrate price-sensitive markets, customize tech for low-data environments, and innovate on the driver-aggregator economy (like its subscription model) gives it staying power in an ecosystem still dominated by a few giants like Ola and Uber.
We’d also love to hear your thoughts and feedback on X. Connect with us there at @bastionresearch.
Happy Investing!!!
Disclaimer: This newsletter is for educational purposes only and is not intended to provide any kind of investment advice. Please conduct your own research and consult your financial advisor before making any investment decisions based on the information shared in this newsletter.
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