Rapido outsmarting ride-hailing giants; no longer Ola and Uber's third wheel
In the past three years, Ola and Uber's combined market share has dwindled from over 90% to around 60-70%
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While ride-hailing giants Ola and Uber have seen their dominance wane in India's burgeoning Rs 40,000 crore market, Rapido, has emerged as a formidable challenger. Unlike Ola and Uber, Rapido charges drivers a fixed fee for accessing the platform, eliminating per-trip commissions.
This model, inspired by Namma Yatri, offers drivers greater earning potential and flexibility. Drivers can earn up to 15% more per trip on Rapido compared to Ola or Uber, making it an attractive option for many, as per Ken's report.
To counter Rapido's growing influence, Uber has resorted to strict measures against drivers who use multiple platforms, highlighting the increasing competition in the ride-hailing industry.
Rapio raised US$200 million from its existing investors including private equity firm Westbridge capital, Swiggy and Nexus Venture Partners this year. Rapido had announced that it would venture into airport taxi services. Aravind Sanka shared that this could contribute over a fifth of the revenue in future driven by the growth in air traffic, as per reports.
In the past three years, Ola and Uber's combined market share has dwindled from over 90% to around 60-70%. Meanwhile, the nine-year-old Rapido, which ventured into cab aggregation in December 2023, has already secured a significant market share of 10-20% in just four major metro cities: Bengaluru, Delhi, Hyderabad, and Mumbai.
The decline of Ola and Uber's dominance can be attributed to several factors, including increased costs and reduced driver incentives. Customers have also expressed dissatisfaction with rising fares and deteriorating service quality.
DoCA had summoned the cab and two-wheeler aggregators in the past to come clean on their charges and algorithms, as consumer angst and frustration with these services rose to alarming levels. The Department also formed a consultation group to address the issue of fake online reviews has also not helped much.
It is to be noted that Ola Electric responded to a show cause notice from the Central Consumer Protection Authority (CCPA) concerning a surge of over 10,000 complaints. While Ola noted that it had resolved 99.1% of the 10,644 complaints received from the CCPA, it did not clarify the total number of complaints filed by customers overall or provide a full breakdown of their status.
Ola was also recently in the news for being in a social media war with comedian Kunal Kamra.
As the market is projected to grow at a 25% CAGR until 2027, Ola and Uber will need to adapt to the changing dynamics and address the concerns of both drivers and customers to maintain their market position.
Why does Rapido work in Bangalore?
According to a report on "Taxi Aggregators Comparative Analysis" by LS Digital and Langoor, in Bangalore, safety as a priority (27%) stood out and indicated that the customer's trust in Rapido is anchored in its commitment to safety, with strong advocacy for women’s security and effective responses to misconduct, fostering a sense of security for all users.
Community Engagement and Empowerment (12%) - By onboarding women drivers and engaging with local influencers, Rapido not only builds trust but also reinforces communtiy ties and promotes empowerment.
In Delhi two things stood out for Rapido - Community Engagement and Promotions (40%) - Active engagement on social media reflected Rapido's commitment to community-building and Ride-Sharing and Accessibility (8%) implies that Rapido bridges urban transportation gaps by offering bike-taxi and auto-rickshaw services, promoting accessible travel across demographics with initiatives like including women drivers.
However, Rapido has some challenges in the capital.
Success Inhibitors in Delhi for Rapido
The report revealed that heavy reliance on promotions may attract users looking for discounts but may fail to build lasting loyalty if users perceive Rapido as primarily a budget option rather than a dependable service for all demographics. Moreover, affordability appeals to students and commuters, but a cost-driven approach could hinder Rapido's ability to sustain service quality, potentially deterring those seeking more reliable or premium ride options.
Operational efficiency gains from tech advancements need better visibility or direct impact on user experience to strengthen trust; otherwise, users may still experience service inconsistency despite backend improvements.
While eco-friendly and traffic-reducing initiatives are positive, without consistent on-ground impact, the benefits may be perceived as limited or theoretical, reducing perceived value among everyday commuters in Delhi.
Accessibility initiatives attract users but may face adoption challenges if reliability or service consistency falters, limiting their potential to build a loyal user base across all commuter demographics.
Why does Ola work in Delhi but not in Bangalore?
According to the report, Ola does not prioritize EV integration or communicate sustainability efforts effectively. It risks losing out to competitors better aligned with these values. Ola seen as worsening congestion or proving unreliable during peak times leading to negative consumer sentiment and reduced usage. Inadequate support for drivers’ harm service quality and customer satisfaction, as an unhappy workforce may lead to poor service experiences for customers.
Ola does not actively engage in or adapt to city-specific infrastructural needs, which may be seen as disconnected from local priorities, harming its reputation. Failing to monitor and respond to social sentiment may lead to deteriorating trust and a damaged reputation if consumer concerns areleft unaddressed.
Why does Uber work in Bangalore but not in Delhi?
The report revealed that Uber customers had concerns over safety create hesitation especially given the heightened safety expectations in Delhi, leading to potential user attrition if issues are not adequately addressed.
Further, regulatory challenges and competition from traditional transport providers contribute to operational difficulties, reducing Uber’s perceived reliability and effectiveness in the Delhi market.
Then resistance from consumers attached to traditional transport or cautious of ride-hailing apps limits Uber’s acceptance, impacting its ability to build trust across a wider demographic in the region. Additionally, gender sensitivity efforts, though important, are viewed as a small part of overall user safety, meaning broader security issues must be addressed to reassure all riders in a city with high safety concerns.
Uber has a better report card in Bangalore because through community involvement, Uber positions itself as a socially responsible service, which resonates with users and enhances its local reputation. It's responsive service creates a seamless experience, making customers feel valued and increasing overall trust in Uber as a reliable, user oriented platform.
All things considered
Both Ola and Uber have focused on community engagement and user trust, but with varying levels of success due to regional differences in consumer expectations. Rapido’s success in Bangalore is due to its eco-friendly initiatives, while Uber’s focus on safety aligns with Bangalore’s user preferences.
In Delhi, each brand faces challenges adapting to unique commuting norms and regulatory pressures. Safety is paramount for Uber and Rapido in Bangalore, while Ola faces pressure to adapt its services and infrastructure support better in Delhi.
No doubt, Rapido's success in major cities has sparked speculation about its potential for nationwide expansion. While the company has made significant strides in Bengaluru and Mumbai, conquering other metros like Chennai and Pune, where Ola and Uber have a stronger foothold, will be a true test of its capabilities.
