In a bold move to disrupt the food delivery landscape, Rapido, a prominent ride-hailing service, is engaging in serious discussions with restaurants and industry stakeholders across four major metropolitan areas. This initiative aims to take on the formidable duo of Swiggy and Zomato, who collectively dominate an astounding 95% of the market share. The timing is critical, as many restaurants have voiced their frustrations regarding exorbitant commission rates and potential conflicts of interest stemming from Swiggy’s recent launch of ‘Snacc’ and Zomato’s ‘Bistro’, both of which promise swift 15-minute deliveries.

Rapido’s Innovative Strategies in Food Delivery

Bengaluru-based Rapido is not only the largest ride-hailing service with over 3 million rides daily, but it is also exploring two innovative models to penetrate the food delivery market effectively.

• Lower Commission Rates: The first approach involves integrating local restaurants directly into the Rapido app, offering significantly reduced commissions compared to the 25-35% charged by its competitors. Many seller-side platforms operating on the Open Network for Digital Commerce (ONDC), like GrowthFalcon, charge around 8-10%, while buyer-side platforms such as Magicpin take a 10-15% cut. Rapido aims to present an even more attractive option for restaurants.

• Subscription-Based Model: The second strategy features a subscription-based Software-as-a-Service (SaaS) model, entirely eliminating commission fees. Restaurants would pay a fixed monthly fee for access to Rapido’s cutting-edge ordering technology and delivery network. This approach reflects Rapido’s successful transition to a subscription framework for ride-hailing drivers in late 2023.

Expert Insights on Market Potential

Pavan Guntupalli, co-founder of Rapido, previously highlighted the potential within any sector where consumer affordability and driver earnings could be enhanced. However, the company has chosen to remain tight-lipped about specific details of its food delivery strategy.

The Challenge Ahead

While Rapido’s ambitions are commendable, breaking the Swiggy-Zomato monopoly is no small feat. In December, Thrive, a Mumbai-based startup with backing from Jubilant FoodWorks (35% stake) and Coca-Cola India (15% stake), ceased operations after struggling to gain traction, despite securing $2.5 million in funding.

With its innovative approaches and understanding of market pain points, Rapido is well-positioned to shake up the food delivery space. As the competition heats up, it will be interesting to see how these strategies unfold and whether they can truly challenge the established giants.