Rapido’s much-anticipated entry into the food delivery market has been delayed beyond its originally planned July pilot launch in Bengaluru, with sources close to the development citing procedural hurdles that the bike-taxi company is still working to resolve.
Zero-Commission Model: Rapido’s Strategy to Disrupt the Duopoly
The Bengaluru-based startup had initially set out a plan to pilot its new food delivery platform ‘Ownly’ in the city, sometime in July, with a distinctive zero-commission flat delivery fee pricing structure that would differentiate it from established players Zomato and Swiggy.
However, more than a month after the initial timeline, the pilot launch remains stalled. Industry insiders clarify that the delay does not stem from any disagreement with the National Restaurant Association of India (NRAI) over the pricing structure, but rather from procedural delays that could be linked to discussions around investor restructuring.
The Swiggy Conflict: Divestment and its Impact
Swiggy, has reportedly initiated a process of divesting its approximately 12% stake in Rapido, to avoid potential conflicts of interest as the ride-hailing company prepares to enter the food delivery business. The three-month timeline for completing the stake sale could potentially influence when Rapido feels comfortable launching its food delivery operations, of the persons aware of the matter added.
Swiggy had led Rapido’s $180 million funding round in April 2022, investing around $120 million when the ride-hailing company was valued at $827 million. The investment was initially seen as strategic positioning in the mobility sector, but Rapido’s expansion into food delivery has now created a conflict for Swiggy.
According to the finalised rate card agreed with NRAI, orders exceeding Rs 400 would attract a delivery fee of Rs 50, with an additional 18% GST, bringing the total to Rs 59 — entirely paid by restaurant partners. For orders ranging between Rs 100 and Rs 400, restaurants would again foot the entire delivery fee, amounting to Rs 29.50 (Rs 25 plus GST). However, for orders valued below Rs 100, the burden would be shared between customers paying Rs 23.60 (Rs 20 plus GST) and restaurants paying Rs 11.80 (Rs 10 plus GST), bringing Rapido a total of Rs 35.40 in delivery revenue from such small orders.
Rapido had also assured restaurant partners that it would not impose platform fees, departing from industry norms where Zomato and Swiggy currently charge customers an additional platform fee of Rs 10 per order, which, with GST, totals Rs 11.80. Additionally, it had also committed to not introducing a subscription fee for restaurants for at least one year from service launch.
Sources indicate that Rapido’s board is scheduled to meet next week, which could provide clarity on both how the investor restructuring will proceed, as well as the food delivery launch timeline.
Rapido and Swiggy did not respond to requests for comments.