Rapido Bets on Low Commission to Challenge Swiggy-Zomato Duo

Ride-hailing platform Rapido is all set to enter India’s online food delivery market with a disruptive pricing strategy aimed at restaurants. The Bengaluru-based start-up has finalised the food delivery costs and terms with restaurants at nearly half the commissions compared to rivals Swiggy and Zomato, according to a report published by The Economic Times.

While Swiggy and Zomato charge commissions of around 16-30%, Rapido will charge only 8-15% from restaurants; depend upon the order value, the report said. It also gave clarification on delivery fee, that is, customers will be charged ₹25 for orders below ₹400 and ₹50 for above.

The start-up is likely to kick off its pilot launch in Bengaluru by late June or early July.

Rapido entered the Unicorn club after raising ₹1,660 crore in its series E funding led by existing investors such as WestBridge Capital taking its valuation to $1.1 billion. Nexus Venture Partners, the existing backer along with new investors Think Investments and New York-based Invus Opportunities participated in the round.

Rapido offers its services in over 100 cities across the country which also includes peer-to-peer delivery services through Rapido Local. The company reportedly operates a fleet of 700,00 riders.

Rapido reportedly takes 2.5 million orders per day, which encompasses taxis, autos as well as cab rides.

Ola, Uber’s Food Bets

Notably, Rapido is not the only ride-hailing platform to enter the food delivery market. In 2015, Ola also launched Ola Café. It even acquired Foodpanda India in 2017. However, the efforts fizzled out and Bhavish Aggarwal-led company exited the space due to operational inefficiencies and intense competition.

However, Ola made a comeback in the food delivery space via the government-supported Open Network for Digital Commerce (ONDC). By mid 2024, Ola was handling between 15,000 and 20,000 daily orders, accounting for nearly a third of ONDC’s food delivery traffic in major metro cities like Delhi-NCR and Bengaluru.

Uber, meanwhile, entered India’s food delivery space with Uber Eats in 2017. But it pulled the plug by early 2020, offloading the unit to Zomato in an all-stock deal worth around $206 million. The deal earned Uber a 9.99% stake in Zomato, and the company has stayed away from the Indian food delivery market ever since.