The unprecedented rise of traffic in metros such as Delhi (NCR) and Bengaluru has made intra-city commute painful, time consuming and irritating. A 10-km distance sometimes requires hours to complete in Bengaluru.
While the emergence of the on-demand cab and autorickshaw hailing services with features like pool have made daily commute affordable, four and three wheels rides are a time-consuming affair.
To solve the time factor attached with a daily commute to the office, bike taxi services have mushroomed over the past couple of years in cities like Gurugram and Bengaluru. However, many of such services have failed to survive after heavyweights – Ola and Uber entered the space. Besides the arrival of deep-pocketed giants, the majority of startups in the segment failed to entice investors for the institutional round.
Competing against Ola Bike and UberMOTO, only a handful of startups in bike taxi space is able to survive and thrive. One such startup is Rapido.
Pointing out the secret sauce that has worked in the company’s favour, Aravind Sanka, co-founder, Rapido says, “We spent time on understanding our customer and captains (one who rides) as this is a new concept in the country. Most importantly, we worked on the product more and then scaled the operations.”
Rapido growth: 10K rides every day with 20% M-o-M growth
Launched in November 2015, Rapido currently claims to execute 10,000 rides every day with an average ticket size of Rs 50. The platform has been able to onboard 50,000 captains (who execute rides) with over 7 lakh app downloads.
The company also claims to have completed 5 million rides since its inception. Bengaluru and Gurugram have turned out to be two major markets for the company.
“Because of consistent traffic congestion, our customers in Bengaluru save about 50 per cent time and cost as well. On the other hand, lack of first and last mile connectivity in Gurugram help our business immensely,” said Sanka.
How Rapido differentiates from Ola Bike and UberMOTO?
Industry estimates suggest that India has more than 120 million two-wheelers. About 40 million of two-wheelers’ owners are either unemployed or underemployed. “Our motto is to use the existing vehicles and create employment for underemployed. Our product highly attracts part-timers and gives much more flexibility for the captains,” explains Sanka.
Captains are not typical taxi drivers who work on a full-time basis but anyone and everyone who has a bike with the aspiration to make money. Sanka claims that Ola and Uber don’t focus much on part-timers. “They tend to create exclusive supply by financing bikes,” he adds. This is one the major differentiator for Rapido over others including Ola and Uber.
Relaxation in regulations paving the way for bike taxis
Every new concept that comes will have to face the regulatory challenge as present regulations are not made assuming the technology innovations. “Unlike several state governments, the central government is very supportive of this initiative as it creates employment, reduces traffic congestion and carbon footprint.
After a central regulation has passed for bike taxis in early last year, 10 states have opened doors for bike taxi startups. “Other states will soon ease out regulations for bike taxis,” says Sanka.
With operations in four cities including Hyderabad and Mysore, Rapido is eyeing expansion to other cities in the next quarter.
Besides Ola Bike and UberMOTO, southeast Asian bike taxi behemoths Go-Jek and Grab are looking at India for expansion. However, team Rapido isn’t concerned as it believes that India is completely different market compared to Indonesia, Malaysia, Thailand, and Singapore.
“Grab and Go-Jek have been able to scale faster as the concept of bike taxi is existing from last two decades but here we have to create the new mode of commute which we think can be done better by the local player and especially someone who focuses on this pain point,” observes Sanka.
The scope of opportunity in bike taxi segment, competition, and funding
First and last mile personal transport is a major challenge in Indian metros. Existing solutions like on-demand cab and autorickshaw services waste a significant amount of time in traffic. Additionally, hailing on-demand cab services are not affordable as daily commute solution.
The aforementioned challenges make bike taxi as a viable option to beat traffic and create flexible employment option for 40 million young bike owners. The Bengaluru-based company has raised two round of seed rounds from the likes of Rajan Anandan, Ankit Nagori, Anupam Mittal, Niraj Singh, Astarc Ventures and others.
Currently, the bike taxi segment is at an early stage in India. After many bike taxi startups had shut down, the segment has about five major players including Ola Bike, UberMoto, Baxi, and Bikxie.
“For us, competition is complimentary as it helps in creating awareness about the concept,” concludes Sanka.