Fresh after raising $240 million in fresh capital, Roppen Transportation Services Private Limited (Rapido) plans to continue its aggressive expansion plans and enter new categories of the mobility market. The Bengaluru-headquartered app-based ride-hailing company, which competes with the global mobility giant Uber and India’s Ola Consumer, is confident of outpacing industry growth and has no immediate plans to go public. In an interaction with TNIE, Aravind Sanka, co-founder, Rapido, said that Rapido is well capitalised and they are not chasing any timeline to launch an initial public offering (IPO). Sanka also shared his view on growth-driving factors, competition from Uber and the expansion of Rapido’s food delivery business. Edited Excerpts:
Rapido has plans to maintain up to 100% year-on-year growth for the next couple of years. How do you plan to maintain this kind of growth without diluting service quality or driver economics?
There are two things that will drive growth at Rapido. One is the city expansion. If you look 18 months or 2 years back, the number of cities we are present in was less than a hundred. Majorly, the top cities and top state capitals used to be our market. Now we are in 400 cities, and there are still a lot of cities where there is no ride-sharing app, and there is no Rapido. We are not covering the entire country. The second thing is category branches. For example, we were only bikes for 7 years, and then we launched auto, and then we launched cab. In recent times, we launched e-rikshas, parcel delivery and metro ticketing services. The idea now is to go after the ways people commute.
It is reported that you plan to launch an IPO by the end of this year. Are you committed to this timeline?
For the IPO, we're not chasing a timeline. We're well capitalised today, so our current focus is on penetrating the mobility market. If and when we need additional capital, we'll evaluate going public. For now, we're doubling down on growth.
Rapid at present has about 3 million captains, and you serve millions of passengers every day. So, what is the headroom for growth?
While this number seems really big, in the grand scheme of the country, it is pretty small. On a monthly basis, all the platforms together, fewer than 50 million people are travelling. This means when compared with the Indian population, 1.4 billion, less than 4% population is travelling every month. So, headroom for growth is left to our imagination. Mobility is such a need for everyone who's coming out of the house, as the number of people owning a vehicle is pretty less in India.
How do you see competition with Uber, given Uber CEO Dara Khosrowshahi recently said that Rapido is their rival? At present, what is your market share across categories?
I can call it acknowledging the competition by Uber, but as I said, we are outpacing the industry growth. We are growing faster than the competitors in the last 3 years, and the beauty is that all the 3 main categories - bike, auto and cabs - are growing actually equally. When we said we are growing at 100%, all three categories are growing in that range. Affordability and the captain (driver) first approach are our advantages. A lot of our things that we do is to keep the captains at the centre. The prime example is the business model change that we brought in 2 years back, where we decided not to charge commission but a flat fee per day. All categories taken together, we are larger than the combined player numbers 2 and 3. I think that we are north of 50% when all the categories are put together.
When are you launching your food delivery business ‘Ownly’ pan India? Also, do you have plans to enter the premium cab services market?
Currently, our food delivery business is in only Bengaluru. We're still trying to learn, as it is a completely new category for us. I think based on how the next few quarters go, we'll then make a call on expansion. Regarding entry into the premium cab category, I would say our focus is affordability because we think India is a price-sensitive market. When the affordability part is fully covered, then we will think of other things.
At present, are there any major regulatory challenges surrounding bike taxis?
It's much better year on year compared with three years ago. What was a major issue a few years back has now improved. For example, the Karnataka High Court decision allowing bike taxis was a very positive outcome. I would also say the sector is creating employment, and it's meeting real consumer needs. We should encourage businesses that address essential needs and generate jobs.
