Rapido Launches Food Delivery Trials in India to Compete with Swiggy and Zomato

Rapido, a prominent ride-hailing service in India, has quietly commenced beta testing for its food delivery service in Bengaluru. This move marks a significant step in its competition against industry giants Swiggy and Zomato in one of the most rapidly growing delivery markets worldwide.

The decade-old startup is currently testing its food delivery service in three key regions of Bengaluru: Byrasandra, Tavarekere and Madiwala (BTM) Layout; Hosur Sarjapura Road (HSR) Layout; and Koramangala. This information was confirmed by Rapido’s co-founder and CEO, Aravind Sanka, in a statement to TechCrunch.

To support its food delivery initiative, Rapido has formed a completely owned subsidiary named Ctrlx Technologies, operating under the brand Ownly. Regulatory filings reviewed by TechCrunch indicate that Sanka and Rapido’s vice president of finance, Vivek Krishna, are the directors of this subsidiary.

Sanka remarked that there wasn’t a specific reason for establishing the subsidiary; however, it may act as a strategic move to mitigate any potential conflicts of interest with Swiggy, which currently possesses a 12% minority stake in the ride-hailing company.

Recently, Swiggy mentioned in a shareholder letter that it would reevaluate its investment in Rapido due to possible future conflicts of interest.

Simultaneously, Rapido’s Ownly introduced its Android app on Google Play, allowing users to order food from nearby restaurants at prices approximately 15% lower than those provided by Swiggy and Zomato.

The competitive pricing is attributed to Rapido’s strategy of refraining from charging restaurants a commission, which can reach up to 30% with other food delivery services like Swiggy and Zomato. Instead, they implement a flat fee per order, a model they proposed to restaurants last June.

Rapido has a fleet of around 10 million vehicles, including 5 to 6 million two-wheelers across India, according to a source familiar with the startup’s operations who spoke to TechCrunch recently. The company plans to leverage this two-wheeler fleet for food deliveries while continuing its taxi and courier services.

To reduce fuel costs and delivery times, Rapido intends to avoid showcasing restaurants that are far from customers, while also curating menu items on its app to boost profit margins while ensuring sufficient discoverability, as shared by an anonymous investor with TechCrunch.

With the insights gained from delivering for Swiggy, Rapido aims to use data on peak delivery times and popular restaurants to enhance its food delivery service, according to the investor.

Although the existing agreement with Swiggy restricts Rapido from entering into contracts with Zomato or other competitors, it does not prevent the startup from utilizing the data it has gathered, as the investor suggested.

Founded in 2015, Rapido originally served as a bike taxi aggregator before expanding into auto rickshaws, parcel delivery, and third-party logistics. The startup ventured into the cab business in 2023, competing against Uber and local rival Ola. Its subscription-based model has gained traction, positioning it as an alternative to the commission-based models of its competitors.

Rapido has also partnered with Taiwanese battery-swapping electric two-wheeler manufacturer Gogoro to incorporate its vehicles into its bike taxi fleet. Recent developments have significantly bolstered the startup’s valuation, helping it achieve unicorn status last year.

As per a report by Bain & Company along with Swiggy from last year, India’s online food delivery market is projected to surpass ₹2 trillion (around $23 billion) by 2030. Currently, Zomato leads the market with a 58% share, while Swiggy holds the remaining 42%, according to Bernstein. Uber had previously joined the market with Uber Eats but sold it to Zomato in early 2020.

To date, Rapido has raised $574 million over 13 funding rounds, as reported by Tracxn. The company operates in over 250 cities and manages more than 3.5 million rides each day. Notable investors include Prosus, WestBridge Capital, Nexus Venture Partners, and Think Investments.