Rapido overtakes Uber to be become India’s top ride-hailing platform
What’s the story
Rapido, a company that started with bike taxis, has now become the leading player in India’s ride-hailing market. The company’s dominance is largely due to its two-wheeler taxi services.
According to data from Sensor Tower cited by Citi Research, Rapido surpassed Uber in monthly active users (MAUs) on Android in January 2024.
By July this year, Rapido had around 50 million MAUs against Uber’s 30 million.
Rapido’s growth challenges Uber and Ola
Rapido has established a stronghold in the bike taxi segment, which usually sees higher volumes. The company also controls nearly 30% of the four-wheeler cab market.
Despite Uber holding half of the online four-wheeler cab market with Ola taking the rest, Rapido’s growth has posed a major challenge to both companies.
This is why Uber CEO Dara Khosrowshahi recently called Rapido “tougher competition” than Ola in India.
In response to Rapido’s growth, Uber cuts fares
In response to Rapido’s growth, Uber has resorted to traditional fare cuts.
According to ET, in Bengaluru, Gurugram and some Mumbai areas where Rapido has seen massive growth, Uber has slashed fares by 20-25%.
The company has also launched a subscription model for drivers where they can pay a fixed daily fee for unlimited rides over 24 hours instead of paying per-ride commission.
Rapido focused on sustainable growth
Despite the competition, Rapido is focused on sustainable growth rather than market leadership at any cost.
The company’s co-founder and CEO Aravind Sanka said that their continued user engagement has strengthened their leadership across bike, auto and parcel services.
“As we now expand into cabs, our priority is to scale responsibly by enhancing driver earnings, improving service quality and ensuring reliable, affordable mobility for all,” he added.
Uber’s strategic shift in India
Uber’s strategy of lowering passenger fares while offering drivers more flexible terms marks a strategic shift in India.
An Uber executive said they had focused on improving customer experience after issues like driver cancelations and poor service quality started hurting them.
However, with Rapido’s rise, the company is now competing on both supply and demand fronts.
Financial backing for both players
Uber’s parent company provides the India entity substantial support, allowing it to continue fare cuts and driver incentives without immediate profit concerns.
On the other hand, Rapido has also raised over $200 million from investors such as WestBridge Capital, Nexus Venture Partners and Prosus.
The company is in talks with Prosus for an additional $300 million in primary capital at a valuation of $2.7 billion.
Source: www.newsbytesapp.com