Updated February 13th, 2024 at 21:52 IST

Rapido to attract auto drivers with zero commission

The online platforms currently account for less than 10 per cent of the market.

Reported by: Business Desk
Rapido FY23 performance | Image:Rapido
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Rapido's new move: Rapido, the ride-hailing platform, has unveiled a significant strategic shift in its business approach by introducing a "zero commission model" for auto drivers. This move signifies a departure from the conventional aggregator-commission-led model, aiming to enhance transparency and inclusivity within the platform.

According to Rapido Co-Founder Pavan Guntupalli, despite approximately 2 crore daily auto rides in India, online platforms currently account for less than 10 per cent of the market. Guntupalli identifies the primary competition not among fellow online players but within the offline market, which comprises around 25 lakh auto drivers in India, with only a fraction currently engaged with Rapido. 

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The company's new zero-commission initiative is designed to appeal to a substantial number of offline drivers and expand its reach.

While acknowledging potential constraints on per-ride revenue margins, Guntupalli emphasizes a long-term strategy focused on revenue derived from maintaining a significant market share. Rapido, currently facilitating around 17 lakh rides daily across all segments, has ambitious plans to double this figure to 30 lakh by the year's end.

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Under the zero-commission initiative, Rapido adopts a Software as a Service (SaaS) model, wherein auto drivers pay a nominal daily access fee rather than a commission per ride. This approach enables drivers to retain their entire earnings, offering financial flexibility and freeing them from commission constraints, ultimately maximizing their lifetime earnings. The company anticipates that this shift not only attract more drivers to its platform but also enhance overall transparency and sustainability within Rapido's services.

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Published February 13th, 2024 at 21:52 IST