‘We Don’t Want to Squeeze Our Driver-Partners with 20-30% Cuts’ - Rapido’s Guntupalli

It’s not just that we started out without financial muscle, even during our journey, we often lacked it.

One of the key things that made us believe in this industry is quite simple. Back in 2014–2015, when you looked at ride-sharing as a problem statement, the penetration was extremely limited. Although there were incumbents in the space, their reach was largely confined to the top Tier-I cities, mostly the top seven, and even there, only about 3–5% of the more affluent population benefited from these services.

All three of us founders come from very middle-class, ordinary backgrounds. Personally, during my entrepreneurial journey, I was jobless for almost two years, trying different ideas. This is my eighth start-up. During that phase of hustling, I faced this problem firsthand: Middle-class Indians didn’t have a convenient commuting option without spending a lot from their pockets. It was extremely difficult for us to manage last-mile travel affordably.

As we went through this experience, one thing became very clear: while it seemed that the ride-sharing problem had been solved, the reality was far from it. In a country of 1.4 billion people, incumbents were solving for just the top 10–20 million users, while the remaining 100–500 million had no real solution.

We wanted to change that, to create an affordable and convenient option that ensured a better commute experience for everyone. That belief pushed us to take this step.

The second key pillar for us has always been impact. One of the reasons we shifted from logistics to ride-sharing was our belief that entrepreneurship should create a positive impact on society. By building an affordable mode of transportation, we could touch millions of lives while also creating jobs.

The fact that incumbents were focused on Tier-I cities and we expanded into Tier-II cities are actually independent things. What truly drove us was our intent to solve mobility for hundreds of millions of Indians, and these people aren’t just in the top seven cities, but across the remaining 1,000 cities in the country.

That’s what gave us conviction. Our core goal has always been to make travel affordable for the common man in India, and that common man also lives in Tier-II cities. One of the things we quickly realized was that in larger metros, there were already several commute options. But as you move deeper into the country, challenges emerge, from poor public transport availability and irregular timings to limited access overall. We saw this as a core problem that needed solving.

That’s why, after Bengaluru, we immediately expanded to Mysuru and then gradually to several smaller cities during our first few years of operations. It was a bold bet, but it stayed true to our purpose, creating meaningful impact and reaching far beyond the top 10–20 million users. Fortunately, it worked.

Today, Rapido is one of the very few, if not the only company that derives more than 40% of its revenue from smaller towns. For most large companies, these geographies form the long tail, contributing just 10–15% of revenue. But for us, our focus on smaller towns and on creating impact there has helped us scale meaningfully.

To give you a sense of scale, in a city like Vijayawada, we cover nearly 33% of the population, meaning one in three people there use Rapido every month. Even in smaller cities like Tirupati or Siliguri, we complete over 10,000 rides daily, more than many e-commerce or mobility startups operating in those regions.

I think the external factors kept changing and evolving for sure. But one thing that has always remained consistent within the company is our focus on creating more value for our stakeholders, which in turn has driven our growth.

For customers, our core pillar has always been affordability. And for our captains—that’s what we call our driver-partners—we’ve constantly pushed boundaries and challenged long-standing assumptions in the industry.

To give a couple of examples: Back in 2015, when UPI hadn’t even launched, we believed that captains should have instant access to their earnings. So, we worked with YES Bank to create an instant settlement system. Whether a customer paid via wallet, card, or any other method, the amount would immediately be credited to the captain’s account.

Years later, another example of how we pushed the envelope was our subscription model, internally called the zero-commission model. We felt that the cost to the company shouldn’t depend on whether it’s a ₹100 ride or a ₹500 ride. So, why should a captain pay more? That thinking helped us design a fairer, more scalable system.

Our focus has always been on creating more impact and adding more value for both captains and customers. In turn, that has brought us a lot of goodwill, more customer love, more captain loyalty, and those metrics have helped shift investor sentiment over time.

At the same time, since we operate in the affordable mobility segment, we’ve always been very frugal and cost-efficient. That’s something that truly differentiates us. We’ve consistently used evolving technologies to drive efficiency, even in our early days, our routing algorithms were logic-based, and now we’re leveraging AI to improve batching and dispatch. The goal is simple: to ensure every ride delivers maximum value to both captains and customers, while maintaining efficiency across the platform.

Read: Rapido Flips the Formula of India's Consumer Tech Unicorns to Disrupt the Uber-Ola Duopoly

I think more than the constraint of not having enough resources, it was the idea that we are an impact-driven company with impact as a core pillar and a focus on building for the affordable segment. We knew that we did not want to have higher margins.

We believe in the concept of giving more back to the ecosystem, to our captains and our customers. So, we have always believed in operating at lower margins. That has been our thought process right from day zero, and it forced us to think differently. If our margins are lower than the incumbents, and our commissions are not 25–30% or squeezing the captains, then how do we survive? Should we rely on a subscription model, or should we only charge a nominal fee? We built our processes keeping this in mind.

Read: ‘Rapido Tops the Mobility Market in India’, Says Prosus Amid Fresh Stake Increase Process

We are in a model where people pay a normal fee to access the technology…The zero commission is what we believe is going to be table stakes. It is going to be the hygiene [for] anybody who wants to give more value to their stakeholders—their customers and captains. Rapido was the first to implement this major move back in 2023 with our cabs, and then with our autos pan India, and right now, we see that the industry is following the norm.

Unlike the early years of our journey, we are now in a much stronger position. The best part is that we are operationally profitable—we don’t lose money, and are well-capitalised. We believe we will go public depending on the stage of the business and the right timing.

It’s a call we’ll take when the time is right. We’re not necessarily looking at a particular timeline or year.

One thing we have always done is keep ourselves prepared so that whenever we decide, the process can move much faster. It’s the same principle we followed when we started, even when we didn’t have major revenues. If you want to remain affordable and impact-driven, you must operate with discipline and with the same guiding principles.

Rapido is currently the largest gig economy job creator in the country. Every month, around 30 lakh captains, which also means 30 lakh families and over 1 crore people, derive income from Rapido’s platform. This is one of the key metrics we track and continuously aim to grow.

As for the term “captain,” the idea came from our understanding that even in smaller towns, many people owned a bike, whether by themselves or within their families or friend circles. We wanted to create jobs within their own towns so they didn’t have to migrate. These individuals come from diverse social and economic backgrounds: students, teachers, professionals, BPO employees, SIM card distributors, and many underemployed or unemployed people.

We were very conscious from the beginning that they are not the typical drivers you see in traditional mobility setups. They have their own social standing. To preserve the dignity of labour, we decided to differentiate them and call them “captains” instead of drivers, something we’ve done right from day zero and continue to emphasize even today.

Our approach has always been simple: If you keep your captains happy, they’ll keep your customers happy. It may sound cliché, but it’s true, and it works.

Impact and safety have been core pillars of Rapido since the very beginning. Because impact was so central to our mission, we always believed that anyone with a bike and the intent to earn should be able to do so, whether they’re from Jodhpur, Patiala, a smaller town, or from Bengaluru or Delhi.

That’s why we’ve consistently focused on enabling that opportunity. Today, around 30 lakh earn active income from the platform every month.

When we started off, the regulatory environment was definitely a lot more unclear. But over the past 10 years, there have been major developments. Today, several states are proactively reaching out to work with us, either to set up new frameworks or to improve existing ones to create more jobs within the state.

Read: Ola Got Distracted, Rapido Is Main Competitor Now: Uber CEO Dara Khosrowshahi

As of now, more than 13 states, including major ones like Delhi, Maharashtra, Rajasthan and Madhya Pradesh, already have frameworks in place. For the remaining states, we’re actively coordinating with them, and we believe that with time, they too will have proper regulations established.

I think it’s as simple as staying much closer to the ground. At Rapido, we knew that while incumbents were doing a large number of rides, the focus on safety wasn’t where it needed to be.

Back in 2015, when we barely had any operations, we were the first company to introduce ride-sharing insurance that started the moment a ride began and ended when it was completed. Today, almost 10 years later, that has become a legal requirement. Even now, we mandatorily provide insurance to both our customers and captains, a standard we set early on that others are now following.

When it comes to safety, we’ve implemented eight proactive measures to keep pushing the benchmark higher. For driver verification, we have three rigorous checks. Once captains join, we conduct a hand-holding process to ensure their driving skills and overall ride experience meet our standards.

We also have real-time tracking to detect if a route deviates from the expected path, allowing us to send proactive alerts. During late-night rides, our system automatically reaches out to ensure both the customer and the captain are safe.