Rapido entered the taxi aggregator space on Tuesday with the announcement of the launch of its new taxi service, ‘Rapid Cabs’. The company already offers passenger pedicabs and three-wheelers to its existing customers. With the launch of the cab service, Rapido will now compete closely with the major players in the cab aggregator market, Ola and Uber. Other market players such as electric vehicle (EV)-based BluSmart and InDrive are also looking to enter the market but have a limited presence.
Rapido will soon launch taxi service
Rapido launched its taxi service about a month ago in Hyderabad and declared that the pilot was off to a “fantastic” start. Online taxi services in India were estimated to be worth Rs 30.72 billion in FY 2020 and are expected to witness a compound annual growth rate (CAGR) of 12.93% between FY 2021 and 2023, and will reach a value of Rs 55,150 crore by the end of the next fiscal year. There is huge untapped market potential in this sector. Ola and Uber are the two biggest players in the ride-sharing space in India, and have also established themselves as the preferred choice for taxi services in India. Before entering the market, the taxi industry was largely unorganized and run by single taxi operators.
While they may not be the first in the industry, Rapido can rely on their existing customers and the increasing demand for these services. It can also aim to offer a better travel experience as neither Ola nor Uber have been able to offer consistent quality in terms of affordability, proximity of cabs, professional drivers and above all, safety. The two companies are also at odds with drivers, who have long demanded better remuneration. Rapido Cabs started with a fleet of 100,000 vehicles. The company also aims to resolve the issue of remuneration of Uber and Ola drivers.
Rapido currently operates in more than 100 cities and has almost 10 million customers and 100 million trips. The company has raised approximately $310 million to date and is backed by Nexus Venture Partners, WestBridge Capital and others. While the company is yet to reveal its FY23 financial results, the FY22 numbers show that the company is facing many challenges. The company’s operating income grew 91.5% in FY22 to Rs 144.8 crore from Rs 75.6 crore a year earlier. However, to achieve this 90% growth, the company had to spend more than double what it did the previous year. As a result, the company’s losses in FY22 increased 2.6 times to Rs 439 crore. The company’s cash outflows in FY22 also doubled to Rs 437 crore.
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Source: vtt.edu.vn