Rising Employee Costs Take A Toll On Rapido; FY22 Loss Widens 163% YoY To INR 439 Cr

Bike taxi startup Rapido has reported a 163% year-on-year (YoY) rise in its net loss to INR 439.02 Cr for the financial year 2021-22 (FY22), largely due to a surge in employee costs.

Its total expenses grew 1.34X YoY to INR 596.96 Cr in the fiscal year ended March 2022. Of these, employee benefit expenses hovered around INR 106.95 Cr, while other expenses stood at INR 484.74 Cr. The startup also spent INR 5.81 Cr on employee stock options plan (ESOP) during the period under review.

Meanwhile, revenue from operations doubled year-on-year (YoY) to INR 144.77 Cr from INR 75.61 CR in FY21. Total income generated during the period under review rose 79.5% to INR 157.94 Cr, compared to 87.96 Cr in FY21. 

Founded in 2015 by Rishikesh SR, Pavan Guntupalli, and Aravind Sanka, Rapido operates a platform that connects users with bike taxis. It also offers auto services and peer-to-peer delivery services via Rapido Local. The startup claims to have a presence in more than 100 Indian cities, with more than 25 Mn app downloads so far.

Last year, Rapido raised $180 Mn in a funding round led by Swiggy. The round also saw participation from investors such as TVS Motors and WestBridge Capital. 

With better pricing options compared to cars, Rapido has also seen a rapid adoption of its services among users, especially for commuters looking to travel short distances and in traffic-prone metros. However, the startup was hit heavily due to the onset of the pandemic. 

From there, it has been a bumpy ride for Rapido, which has also been involved in a major tussle with the authorities of Karnataka and Maharashtra over its auto services. Earlier this month, Rapido, on the directions of the Bombay High Court, had to suspend its services across Maharashtra. 

It is also locked in a legal tussle with the Karnataka government, which has deemed app-based auto services as illegal in the state. Last year, the startup got involved in a showdown with the authorities of Meghalaya transport department, which banned bike taxis in Shillong.

Rapido has also seen a slew of protests by workers in Maharashtra and Telangana, calling for a ban in some cases. 

While competitors such as Ola and Uber have figured out the game of better margins and better unit economics, Rapido still seems to be finding its way. With mounting losses, Rapido could be looking at a long patchy road ahead.