Rapido Expands Zero Commission Model For Auto Drivers

SUMMARY

Under this model, Rapido plays no role in deciding the price point, making the service transparent and inclusive for all stakeholders

The company will charge auto drivers a daily fee of INR 9 to INR 29

With this move, Rapido is aiming to reduce high commission rates

Ride-hailing startup Rapido on Tuesday (February 13) extended its software-as-a-service (SaaS)-based zero commission model to auto drivers.

The company said in a statement that it is making a shift from aggregator-commission-led model to introduce a lifetime zero commission model for its auto drivers, aiming to reduce high commission rates and empower them to control their earnings.

Rapido will charge auto drivers a daily login fee ranging from INR 9 to INR 29. In return, drivers can do unlimited rides based on demand, without paying any commission.

This comes days after Rapido forayed into cab booking services space with the launch of Rapido Cabs in December last year. Back then, the startup said it was banking on its zero-commission model to onboard drivers to its platform.

Rapido, which currently facilitates more than 5 lakh auto rides daily, aims to onboard offline auto drivers to its platform.

Rapido’s cofounder, Pavan Guntupalli, said that the SaaS platform is transforming the traditional commission system for auto drivers.

Guntupalli said, “Nationwide, we have enabled auto drivers to earn over INR 2700 Cr since inception and strive to put maximum earnings to those who provide us with the commute.”

Rapido’s cab drivers have been using the SaaS model-based discovery platform which will now be accessible to the auto drivers as well. This allows auto drivers to have a more efficient and reliable digital experience.

The SaaS model operates on a nominal access fee, which empowers auto drivers to maximise their earnings and take home a fair share of their hard work at the end of each day. By directly receiving payments from customers, drivers break free from commission constraints, maximising their lifetime earnings. This fosters an inclusive platform benefiting both drivers and customers alike.

Founded in 2015 by Guntupalli, Rishikesh SR and Aravind Sanka, Rapido earns a majority of its revenue from providing auto and bike taxi services. It also offers peer-to-peer delivery services via Rapido Local. With a fleet size of 5 Mn bike taxis and 7 Lakh auto-rickshaws, the startup claims to operate in over 100 Indian cities and have over 25 Mn app downloads.

To date, the startup has raised over $300 Mn across multiple rounds and counts TVS Motors, Nexus Venture Partners and WestBridge Capital among its investors. In April 2022, the startup raised $180 Mn in a round led by Swiggy, valuing it close to the $800 Mn mark.

Rapido competes directly against Ola and Uber, as well as newer entrants like BluSmart.

The Swiggy-backed startup recently reported a 53.6% widened standalone loss of INR 674.5 Cr in FY23 against INR 439 Cr reported in the previous fiscal year.