iRapido, a leading ride-sharing platform in India, is exploring a strategic entry into the food delivery market, aiming to disrupt the dominance of Swiggy and Zomato. The company is currently in discussions with restaurant owners to develop a business model that challenges the existing commission-based structure of these industry giants. This move comes after Rapido achieved significant success in the ride-sharing space, crossing $1 billion in annualised gross merchandise value (GMV) and expanding its operations to over 100 cities across India.
Rapido is considering a subscription-based model for its food delivery services, which could differentiate it from Swiggy and Zomato's commission-heavy structures. This approach might appeal to restaurants seeking lower fees and more predictable revenue streams.
Rapido already offers delivery services for individual restaurants using its two-wheeler fleet and has experience in logistics through its partnership with Swiggy and the Open Network for Digital Commerce (ONDC). This existing infrastructure could provide a cost-effective advantage in food delivery.
Rapido aims to expand its services to 500 cities by 2025, leveraging its strong presence in the mobility sector to drive growth in food delivery. The company recently raised $30 million from Dutch investor Prosus, adding to its previous funding round of $200 million led by WestBridge Capital. This financial backing supports Rapido's ambitious expansion plan.
Rapido's entry into the food delivery market comes at a time when the sector is experiencing slower growth and heightened competition. The company faces the challenge of disrupting an established duopoly while navigating systemic issues such as commission disputes between restaurants and aggregators. However, with its logistical expertise and potential for a more cost-effective model, Rapido could offer an attractive alternative to both restaurants and consumers.
