Rapido’s Co-founder and CEO, Aravinda Sanka, ruled out the possibility of an initial public offering (IPO) in the near future, stating that the company’s focus is on expanding further into tier 2 and tier 3 cities, as well as exploring opportunities in the quick commerce sector. In an interview with BW Businessworld, he explained, “Our goal is to continue growing and increasing market penetration, and we will consider listing at the right time. As of now, there are no immediate plans. We currently operate in 100 cities, but our target is to expand to at least 200 to 300 cities in the coming years.”
Below are highlights from the interview:
How did the three of you come together to launch Rapido, and what has the journey been like?
It’s been 10 years since we teamed up with a shared goal of building something big, something impactful, and something scalable. When we started a decade ago, we explored various ideas, and Rapido was actually a pivot from an earlier concept. We’ve now spent nine years shaping the concept of bike taxis in India.
We knew this was a novel idea with no prior existence in the country. We were also aware of the established players in the market and the challenges that lay ahead. However, what kept us motivated was the immense impact we believed this new category could create.
How does Rapido stand out from competitors like Ola and Uber? Can you provide a personal example that illustrates this distinction?
Our business model and operations set us apart from the competition, both in terms of consumer experience and pricing. Customers receive a better service at a lower cost compared to other platforms. How is this possible? We keep ride prices lower by charging a smaller commission, which is feasible due to our efficient cost structure.
All of these factors are interconnected: lower prices, reduced commissions, and yet our drivers—whom we call captains—still earn more. This creates a win-win situation where customers are happy, captains are satisfied, and the platform thrives.
The challenge of expanding into tier 2 and tier 3 cities is a common issue for quick commerce as well, with even major players striving to enter these markets. Are there any plans for Rapido to venture into the quick commerce sector and boost its presence in Tier 2 and Tier 3 cities?
We see tremendous growth opportunities in tier 2 and tier 3 cities because, fundamentally, people need affordable transportation. Our ticket sizes are small, and currently, we handle logistics for food delivery, but we’re also moving into the quick commerce space. We plan to serve as the logistics partner for quick commerce platforms, regardless of the location. We will expand into every city where our clients need us. At present, we already provide food delivery services in Tier 2 and Tier 3 cities for Swiggy and ONDC.
How do you maintain the balance between demand and supply? And what feedback mechanisms do you have besides your app?
To gather feedback, we personally drive autorickshaws, bikes, and cabs, and we also use the platform regularly as users. This allows us to collect direct input from both customers and captains, helping us identify areas for improvement and shape our future actions.
Have there been any changes to the company’s policies or delivery methods based on customer feedback?
Yes, based on feedback, we’ve made adjustments. For example, customers are often willing to pay more for rides when it’s raining or when they’re in a rush. However, sometimes they feel our prices are too high and want more control over them. In response, we’ve given customers full control over pricing, allowing them to adjust it according to their needs. This change came directly from feedback that our pricing didn’t always match customer expectations.
You may be aware of a case filed against Rapido regarding the auditing of provisions for individuals with disabilities. The Delhi High Court has directed you to submit a report on this matter. Can you provide details about the case and Rapido’s response?
The court has requested an audit to assess whether our app is accessible and user-friendly for individuals with disabilities. We will comply with this request and provide the necessary report. Currently, some screens in our app are not fully accessible to users with disabilities, and we are committed to making the required adjustments.
While Ola, Uber, and Rapido are all involved in this issue, only Rapido attended the hearing, demonstrating our commitment to addressing the concern. We are eager to incorporate feedback from various authorities and users to improve our app’s accessibility.
We are planning significant enhancements to make our app more user-friendly. Although most screens are already accessible, there are a few that are not yet accommodating for all users, and we will address these issues promptly.
Shifting from user-friendliness to sustainability, how does Rapido address environmental concerns?
In several cities, we have made substantial progress with electric vehicle (EV) adoption. For example, in Delhi, 25% of our rides are already on EVs, and we aim to reach 100% within the next year. In Bangalore, we operate electric three-wheelers and demonstrate their viability to drivers and fleet operators, showing that EV autos can be a profitable business. This helps us build a supportive ecosystem around electric vehicles.
EV penetration varies by city, with some cities having higher adoption rates due to a more developed ecosystem. Overall, our team is committed to increasing the number of EV rides, including two-wheelers, three-wheelers, and four-wheelers, through our partnerships with fleet operators.
Are you planning to completely transition to EVs in the coming years?
The transition to EVs will be a gradual process. We will work with fleet operators and the ecosystem to convert existing vehicles to electric. This transition will occur at a faster pace compared to private or commute vehicles, with incremental progress each year.
Rapido is now a unicorn. When might we expect an IPO?
Timing is everything. Currently, we are not focusing on an IPO. Our primary goal is to continue expanding and increasing our market presence. We will consider listing at the right moment, but there are no immediate plans at this time.
What advice would you give to emerging leaders in the industry?
It’s crucial to stay true to your vision and the purpose behind your venture. When you remain committed to your cause and beliefs, it empowers your team to make independent decisions and address challenges effectively. This approach has been fundamental to Rapido’s success. Our dedication to creating impact and generating employment has been key. My advice to leaders is to remain steadfast in your mission.
You had a startup before Rapido. How did you leverage that experience? And over the past 10 years, have there been moments when you felt like giving up?
Rapido’s journey has had its share of challenges, including fierce competition, fundraising difficulties, and the impact of COVID-19. Out of the nine years Rapido has been operational, about six and a half years were particularly tough, with only two and a half years being relatively smooth.
Nevertheless, the stories from our captains and the significant impact we’re making—especially in addressing unemployment in India—keep us motivated. The realization that we are tackling one of the country’s major issues makes the hardships worthwhile. There’s nothing more rewarding than contributing to such a meaningful national cause.
Is there anything you’d like to share about Rapido’s future or your leadership approach?
We are deeply invested in our people and committed to offering them opportunities, which is a fundamental aspect of Rapido’s ethos. Our leadership team’s average tenure is over four to five years, and our employees are enthusiastic about the impact we’re making. This commitment and passion are something we are genuinely proud of.