Rapido Aims for 15-20 Percent Cab Service Revenue Share by 2025
"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 participating on this platform 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 operate on all these platforms. And even if they are operating, they are operating daily", says Guntupalli.
As per the company's statement, Rapido Cabs is adopting a zero-commission approach for cab drivers. Under this model, drivers will incur a modest subscription fee of ₹500 once they achieve a monthly income of ₹10,000. It's noteworthy that Rapido, currently holding a 60% market share in bike taxi services, has no intentions of seeking additional funds to support its cab services venture. "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 at least to sustain our cabs business", says Guntupalli.
In contrast to many of its competitors who have already entered the electric mobility sector, Rapido has introduced its petrol-based cab services. The company is taking a measured approach and not hastily transitioning to electric vehicles. Instead, it is actively engaging with the government to comprehend the challenges associated with electrification, including aspects like financing, charging infrastructure, and pricing, as stated by 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.