Bengaluru-based ride-hailing platform Rapido nearly doubled its revenue to Rs 144.8 crore in FY22 from Rs 75.6 crore in FY21, the company’s annual financial statement with the registrar of companies (RoC) showed. However, despite a 90% growth in scale, the firm reported losses surging 2.6 times to Rs 439 crore in FY22, as compared to the previous fiscal.
The company’s income sources include commissions charged on bike taxis, autos, delivery services, subscriptions, and marketing. The on-demand ride aggregator for two and three-wheelers, which is backed by Swiggy, also provides logistics services to the food delivery platform and other quick commerce companies.
Meanwhile, the company earned Rs 13.2 crore from interest on current investments and other non-operating income in the period under review.
Cash outflows from operations reached Rs 437 crore, doubling during the year.
On the expenditure side, incentives and related charges emerged as the largest cost centre, contributing 35.8% of total expenses. These payments surged to Rs 213.6 crore in FY22 from Rs 70.6 crore a year ago, marking a threefold increase. Marketing costs accounted for 29.6% of total expenses, jumping 5.4 times to Rs 176.7 crore during the reported year from Rs 33 crore in the previous year.
Employee benefits expenditures grew by 73% to Rs 107 crore, including contractual labour support costs of Rs 40 crore. It also encompassed ESOP expenses of Rs 5.8 crore. Additionally, Rapido incurred infrastructure and software charges of Rs 24.96 crore, leading to a 2.3 times increase in total expenditure to Rs 597 crore in FY22 compared to Rs 254 crore in the year-ago period.
Alongside escalating costs and losses, Rapido faced weakened EBITDA margin and ROCE, reaching -274.52% and -1,029.72%, respectively. Its unit economics suffered, spending Rs 4.12 to earn a rupee of operating income during FY22.
In the period under review, the platform, which predominantly functioned as a taxi and auto aggregator platform, achieved soonicorn status when it secured $180 million at a valuation exceeding $800 million in April last year. Since then, the company has also ventured into four wheeler cab services deployed through a 0% commission model for its drivers. Its biggest rivals Ola and Uber both operate on a commission model that amount to 25-35% of the ride fare.
The move was also largely seen as being provoked by other players re-entering the bike-hailing space, one in which Rapido has been a market leader with over 65% share. For instance, Ola has restarted its bike taxi service through an all electric fleet. The move is said to have impacted Rapido market share considerably, at least in cities like Bengaluru and Mumbai.
It’s also important to note that the non-EV bike taxi space is dealing with multiple regulatory challenges, brought about by increasing backlash from auto driver associations in states like Karnataka, Tamil Nadu, Telangana, and Maharashtra.
In Karnataka, the state government is engaged in a legal battle with the company, which alleges that under existing transport authority laws, non-EV two wheelers do not have the adequate permissions to ply for commercial purposes. Meanwhile, the Telangana Gig And Platform Workers’ Union (TGPWU) has also sought a ban on the company. Similarly, in July last year, the Meghalaya transport department banned the plying of two-wheelers operating as taxi services both online and offline in Shillong.
In its ongoing legal battles, the company has maintained that it does not fall under the purview of aggregator regulations as it is merely a software-as-a-service provider, which does not deal with the payments directly. It has also argued that the scaling up of its two-wheeler services has helped generate a considerable amount of job opportunities, and income for individuals across the cities it operates. Any outright ban on such services, it believes, would negatively impact the community.
The company, having raised over $300 million, counts WestBridge, TVS Motor, Shell Ventures, and Nexus Ventures among its backers. It claims to have a customer base of 30 million users, and does a million rides across 100 plus cities on a daily basis.
