India's Rapido Overtakes Global Giants with a Hyperlocal Formula
- Rapido surpassed Uber and Ola in app downloads and daily rides in India, achieving 4.3 million rides per day and over 33 million downloads in 2024.
- Its low-cost, subscription-based model for motorcycle taxi drivers charging as little as Rs 9 per day has disrupted the traditional commission system.
- Now profitable and eyeing a public listing, Rapido faces legal hurdles in states like Karnataka and Maharashtra but continues expanding across smaller Indian cities.
Bangalore-based ride-hailing startup Rapido is quietly overtaking global giants Uber and Ola in India, marking a significant shift in the country’s transportation landscape. With a business model centered around affordable motorcycle taxis and driver-friendly pricing strategies, the company is outpacing its larger rivals in both user acquisition and daily ride volume. Now profitable and eyeing an IPO, Rapido is quickly becoming a formidable player in one of the world’s last major growth markets for ride-hailing services.
Rapido, founded in 2015 and headquartered in Bangalore, recorded around 33 million app downloads in 2024 more than Uber’s 21 million and Ola’s 19 million according to analytics firm Appfigures. The platform now logs 4.3 million daily rides across its fleet of motorbikes, auto-rickshaws, and cars, which is triple Ola’s count and 40% more than Uber’s, according to the company’s co-founders.
“What the four-wheeler is to the US, we believe two-wheelers are to India”, said Co-founder Pavan Guntupalli. “Even in a small village you can find a farmer or a farmer’s son owning a two-wheeler”.
Unlike Uber and Ola, which typically take a commission from each ride, Rapido has pioneered a subscription-based model that charges its drivers as little as Rs 9 (about $0.11) per day to access the platform. Drivers keep 100% of their fares, starting at Rs 20 per ride. This zero-commission structure has helped Rapido attract a massive driver base, particularly in cities with limited public transportation and low car ownership.
In response to Rapido’s rapid growth, both Uber and Ola have introduced similar zero-commission options for certain drivers, signaling a shift in the competitive dynamics of India’s ride-hailing industry.
Despite its recent success, Rapido operates in a highly contested and regulatory-challenged environment. The startup temporarily suspended its motorcycle taxi services in its home state of Karnataka following a high court ruling that deemed the use of personal two-wheelers for commercial services illegal. The legal matter remains under judicial consideration. Similar restrictions have been reported in Maharashtra, where non-electric motorcycle taxis are also banned.
Nevertheless, the company remains bullish on its long-term prospects. Rapido has raised over $200 million in funding from investors such as WestBridge Capital, Nexus Venture Partners, and Prosus, with its latest round valuing the company at $1.1 billion post-money. Currently operating in over 250 Indian cities, Rapido plans to expand into smaller towns and semi-urban markets.
“Do we want to IPO? Definitely yes”, said Co-founder Aravind Sanka. “But we’re in no rush our focus right now is sustainable growth. We have enough capital to take us forward”.
India, with a population exceeding 1.4 billion, represents a key growth market for ride-hailing companies. While Uber dominates in developed markets like the U.S., its efforts to grow in Asia have been mixed. The company exited China in 2016 and Southeast Asia two years later. That makes India one of Uber’s last remaining large-scale opportunities in Asia.
“India is not just one of Uber’s biggest markets, it’s one of our most strategically important”, said Dom Taylor, Uber’s Asia Pacific head of mobility, during a media event in Mumbai. Uber recently launched a feature allowing users to pay lower fares in exchange for longer wait times, a move aimed at attracting more price-sensitive riders.
Founded in 2010, Ola predates both Uber’s India entry in 2013 and Rapido’s launch by several years. Backed by billions in funding, both Ola and Uber have invested heavily in advertisements, driver incentives, and diversifying into two- and three-wheeler rides to grow their footprint. However, Rapido’s lean model and low-cost offerings appear to have struck a stronger chord with India’s middle class.
“Our business is growing sustainably at an incredible pace, and we are well positioned for long-term success”, an Uber spokesperson said in response to Rapido’s rise, emphasizing Uber’s leadership in the automobile segment which commands higher margins than two-wheelers.
Rapido is also focusing on safety and inclusivity. The company has launched women-only taxi services driven by women and is installing seatbelts in auto-rickshaws a feature typically missing in such vehicles. According to the founders, their deep understanding of the average Indian consumer is what sets them apart from international competitors.
“We ourselves are middle-class Indians”, said Guntupalli. “We understand what the common man needs”,
While regulatory uncertainty and potential tax liabilities, such as the applicability of GST on zero-commission rides, continue to pose risks, Rapido’s momentum is undeniable. Its disruptive approach is forcing incumbents to rethink their strategies in India’s dynamic ride-hailing sector.
With profitability achieved and public listing aspirations on the horizon, Rapido’s journey from a local startup to a unicorn leading the charge in India’s mobility revolution is a compelling story of innovation, resilience, and market adaptability.
