CHENNAI: Bengaluru-based ride-hailing start-up Rapido has introduced a subscription fee-based model for auto drivers using the platform.
Under this, the drivers could pay a particular amount for using the app instead of paying commission for rides. Auto drivers will have to pay an access fee ranging from Rs 9 to Rs 40 per day, depending upon the city. Drivers in bigger cities will have higher fees, as the earning scope is high. Rapido doesn’t decide the trip charge.
Pavan Guntupalli, co-founder of the start-up, wants to scale up the auto fleet size attached with the platform to make this a viable model.
He agreed this fee model will bring down the margins of the company in the near term but asserted that more revenue could be generated once it scaled and market share. However, he said this is not an unsustainable business and they’re not burning cash.
He wants to double the auto fleet size to 10 lakh in a year. “Around 17 lakh rides across different platforms. But an estimated 2 crore auto rides are happening in the country everyday. We’re thinking how do we bring more auto drivers to our platform.” As on date. 1.5 crore auto rides are taken every month on it, according to Rapido. Pawan wants to ‘disrupt the commission model with software as service business (SaaS) SaaS model’ and believes this will be more transparent for drivers and improve their earnings and the increased pie will bring more revenue to the company.
Its losses reportedly rose in FY23 to Rs 675 crore compared to Rs 439 crore in FY22. Pavan Guntupalli said the company has turned operationally profitable and soon will turn profitable in EBITDA margin.