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Rapido's bike-taxi empire is under fire. Its bet: biryani, cabs and credit

New Delhi: These days, Rajesh, who used to be a bike-taxi rider with Rapido, no longer ferries passengers across Bengaluru. With the two-wheeler service being declared illegal, he like other Rapido riders, has switched to food-delivery, a play Rapido is testing with its newly launched Ownly service. "I do this at night while attending college in the morning," Rajesh adds. "I use the same bike -- it's convenient, and the extra cash helps cover my expenses." He is unsure if Rapido will be able to break the Swiggy-Zomato duopoly, which has a stranglehold over the food delivery business. "Who knows if they'll crack it. If not, we'll just have to switch to Swiggy or Zomato," says Rajesh, as he waits for his phone to ping in the city's upmarket Koramangala locality. Industry executives estimate that Rapido commands roughly 60% of India's bike taxi market. But in two of its largest markets, Karnataka and Maharashtra, the rules governing bike taxis have become stringent. Karnataka's blanket ban landed in June, cutting Rapido off at the knees in one of its most important markets. The state accounts for 5 million of the 26 million monthly rides nationwide, according to Nikhil Dhaka, vice president at Primus Partners, a management consulting firm in Delhi. "A ban in just one state, Karnataka, could shrink the total bike taxi usage in India by nearly one-fourth," he says. To the west, Maharashtra has been more accommodating, but with a catch: bike taxis are permitted only if they're electric. For riders on budget petrol two-wheelers, that caveat offers little relief. Rapido operates a fleet of about 10 million vehicles nationwide -- more than half of them two-wheelers, according to industry estimates. Bike taxis aren't just another line item in Rapido's books -- they make up nearly half its revenue. Three-wheelers and cabs contribute the rest, but neither matches the scale of its two-wheeler play. That's why the regulatory chokehold in Karnataka, its most important market, and the electric-only caveat in Maharashtra, have struck at the heart of its business. On 21 August, Rapido got a flicker of hope in Bengaluru after a bench of the Karnataka High Court questioned the blanket ban on bike-taxis. That prompted Rapido and Uber to briefly resume their services in the state capital. A day later, however, the court clarified that its oral observations had not amounted to permission, and that the state government was free to act against aggregators -- putting the legality of bike taxis in limbo once again. Adding to its troubles, India's Central Consumer Protection Authority slapped Rapido with a ₹10 lakh fine for misleading ads and unfair trade practices. The company has also been directed to reimburse customers who availed of its 'Auto in 5 minutes or get ₹50' scheme but never received the promised compensation. The scheme promised compensation if an auto didn't arrive on time. Instead of money, users reported that they got ₹5 Rapido coins instead, with restrictions like 'valid only on bike rides, expiring in 7 days'. Mint reached out to Rapido on 18 August but is yet to receive a response. In a prepared statement sent earlier, the company said it is "actively pursuing all avenues to support our captains (Rapido's term for its gig workers)". "Rapido remains hopeful that our continued engagement with the government will pave the way for a viable framework for bike taxis and the millions of gig workers who depend on them -- just as it has in several other states and union territories," it added. Unlike autos or cabs, bike taxis lack uniform legal recognition across India. That tilted slightly in July 2025 when the central ministry of road transport and highways issued fresh guidelines allowing private two-wheelers to be used for passenger rides via aggregator platforms. While it is not an automatic approval, it lays down a formal path to legalization, one that could reshape urban mobility, but only if states choose to adopt it. A key issue for state regulators is the white number plate. Most Rapido riders, like Rajesh, use personal bikes, but states demand commercial (yellow-plate) registration. For part-timers, switching isn't viable. Moreover, yellow plates carry a social stigma. "I use the same bike for ride-hailing, deliveries, and even college," says a 21-year-old Rapido captain in Maharashtra. "But when I park it at home, the yellow plate draws questions and unwanted attention. People look at you differently." Rapido's food pivot, Ownly, is its way out of the bike-taxi chokehold -- bikes can't carry people, but they can still carry pizzas. The idea is to challenge the Zomato-Swiggy duopoly, which controls the ₹60,000-crore food delivery market, with Zomato commanding a 54% share and Swiggy holding 46%, according to brokerage firm Bernstein. The playbook is familiar: undercut incumbents on commission rates and woo restaurants with better economics. While Swiggy and Zomato typically charge anywhere between 15-30% per order, Ownly is piloting a commission band of 8-15%, according to food delivery executives. For many restaurants, particularly smaller ones, that difference can be meaningful. Rapido isn't entering cold either. It got a feel for the business through its partnership with Swiggy, dating back to 2022. In April that year, Swiggy led a $180-million investment in Rapido for a nearly 12% stake, its single-largest cheque in a startup. This was framed as a marriage of convenience -- Rapido's riders could double up as Swiggy's food couriers. Two years on, Rapido has turned from partner to rival. By handling the company's deliveries, Rapido picked up valuable intelligence on peak hours and high-demand restaurants -- data it now hopes to repurpose for its own food delivery play, an investor in Rapido told Mint on condition of anonymity. According to another investor, Rapido's arrangement with Swiggy bars it from tying up with rivals such as Zomato, but places no restrictions on using the operational insights it gathered while running deliveries. Ownly has been set up under a wholly owned subsidiary called Ctrlx Technologies, with co-founder Aravind Sanka and vice president-finance Vivek Krishna as directors, regulatory filings show. "Creating a separate subsidiary may simply be Rapido's way of avoiding any potential conflict with Swiggy, which holds a stake in the company," says an industry executive in the food delivery sector. Whatever the intent, the food-delivery gambit has fractured the relationship. Swiggy has said it will re-evaluate its holding, citing a 'potential conflict of interest'. Upset with the huge commissions and other payouts they shell out to Swiggy and Zomato, restaurateurs, meanwhile, have welcomed Rapido's entry. "What makes the Rapido entry truly promising is that it's both economically viable and democratically structured, which is critical for the long-term sustainability of restaurants, especially the smaller ones," says Sagar Daryani, president, the National Restaurant Association of India (NRAI), an industry body. Customer data has long been a contentious issue for restaurants with Zomato and Swiggy, which Rapido is looking to use to its benefit. "One of the biggest advantages of this initiative is that it gives us access to valuable customer data, which is essential for building relationships and improving service," Daryani adds. Still, Rapido's food pivot will be on a road littered with failures: Amazon exited, Ola and Uber burned cash before exiting, and ONDC's policy push barely moved the needle. Cracking the Swiggy-Zomato duopoly will be harder than it looks on paper. To retain drivers, Rapido is leaning on its oldest trick -- zero commissions. "If a driver has already paid a fixed fee, they'll continue to log in and complete rides to recover that sunk cost," explains Gaurav Chabbra, partner at Kearney, a consulting firm. But the numbers don't quite add up in Rapido's favour. Unlike earlier entrants, it is stepping into a far more mature, crowded, and unforgiving market. According to a 11 June research note by Bernstein, Rapido's entry is unlikely to dent the entrenched Zomato-Swiggy duopoly, given the sheer complexity of food delivery. In a separate note, HSBC echoed the scepticism, arguing that while new entrants may win over the industry's tail-end customers -- where margins are already thin -- they are unlikely to meaningfully disrupt the duopoly at the top. "Commission wars don't fix last-mile physics. A new entrant will need density and disciplined burn, not just lower commissions, to break even," says Nilaya Varma, co-founder of Primus Partners. Lower commissions mostly benefit restaurants; platform margins still depend on density, batching, platform fees, and marketing take rates (take rate refers to the share of each order that the platform keeps as revenue). Low prices can help acquire users, but they will stick around only if there is reliability and Ownly's selection matches the incumbents, Varma adds. The incumbents, meanwhile, have been raising platform fees, charged on customers placing orders and sparing restaurants, to shore up unit economics; Swiggy recently hiked its platform fee to ₹14 in select zones. Analysts point out that Indian consumers are frugal rather than brand-loyal, often switching between apps for the lowest bill. "If you can keep overall delivery costs low, you stand a chance," says Primus' Dhaka. Beyond food, Rapido is also eyeing the bike and carpooling market -- still embryonic but indicative of its appetite to widen the mobility play, by testing every adjacent avenue it can find. Public filings show the company has set up a new entity, Flexiride Solutions Pvt Ltd, to house a separate app called Hopr. The directors include Rapido's vice president-finance Vivek Krishna, and Akash Sachdev, who leads new initiatives at the company. However, carpooling has had a bumpy ride in India. At its core, the model involves car owners sharing empty seats with commuters headed in the same direction. The commuters are matched via apps for a small fee, easing per-trip costs and congestion in urban areas. But practical challenges abound. Without a critical mass of drivers and riders, finding matches -- even for daily commutes -- can be difficult. "Closed, trust-anchored networks around tech parks (e.g., Quick Ride in Bengaluru) have seen pockets of adoption, but city-wide, open carpooling has struggled with trust and regulatory ambiguity," says Varma. Post-pandemic, city and state policies on ride-pooling have diverged: Assam permits limited private-car sharing under aggregator rules; Chandigarh proposed regulated pooling with strict KYC; Maharashtra has cracked down on unlicensed services. Against this backdrop, Varma says, "The Hopr pilot is sensible as a corridor-based experiment, not a core revenue engine. The viability improves with corporate tie-ups, verified users, and women-only options." Rapido began edging into the cab business in 2023, pushing into a market sculpted by Uber and Ola. By December 2024, it had quietly carved out a 14% share, behind Uber (50%) and Ola (34%), according to equity advisory firm Equentis. That momentum has not gone unnoticed. Signalling a shift in the country's ride-hailing hierarchy, Uber CEO Dara Khosrowshahi recently described Rapido -- not Ola -- as the company's "prime competition" in India, during an appearance on Zerodha co-founder Nikhil Kamath's podcast. Rapido has flipped the script on driver commissions, charging a fixed subscription fee instead of taking a per-ride cut -- a model now being followed by Uber and Ola for autos and cabs. With the goal of deepening its grip on its rider base, the company is eyeing lending and allied financial services, in a modest fintech play, YourStory reported in April this year. Platforms such as Rapido sit on rich, real-time earnings and activity data from riders with irregular income -- many underserved by formal credit. That data can underwrite bite-sized loans, income-smoothing advances, and micro-insurance. The fintech move, where it can partner with non-banking financial companies, is a natural adjacency. "The company wants to monetize the data they already have. Since they know the income of their partners, they can use that insight to offer lending solutions," says Satish Meena, co-founder of Datum Intelligence, a data analytics firm. Yet the rider base is a volatile borrower group, as earnings swing, riders switch apps, and seasons matter -- so missed payments can jump if lending relies on weak signals, he adds. While it is not clear exactly how Rapido plans to go about building a fintech business and obtaining the requisite licences, if it does decide to dip its toe, it will be in waters that are regulated even more than the commuting segment. It will also need to build a talent pool to drive the business, which is very different from connecting passengers with captains or delivering food. For Rapido, the paradox is clear: it has never been more ambitious, or more vulnerable. New bets in food delivery, cabs, carpooling, and even fintech may promise fresh lifelines, but the company's future still hinges on a patchwork of state rules that could decide whether its core business lives or dies.

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