No IPO Plans As Of Now, Says Rapido Founder

Rapido’s Co-founder and Chief Executive Officer (CEO), Aravinda Sanka, denied the possibility of Rapido’s initial public offering (IPO), as the company is planning to further expand in tier 2 and tier 3 cities and explore the quick commerce segment. While talking to BW Businessworld, he said, “The idea is to keep growing and keep increasing penetration, and at the right time, we will be listing. So, no immediate plans as such. We will be starting in smaller cities, as currently, we are present in 100, but we want to be in at least 200 to 300 cities in the next few years.”

Here are the excerpts from the interview;

How did the three of you come together to start Rapido, and how has the journey been so far?

It's been 10 years since we came together to do something, to do something big, to do something at scale, to do something which can create impact. So that was the thing that when we started 10 years back. We were going on a few ideas and then Rapido was a pivot from a previous idea. So it's been nine years since we started the concept of bike taxis in the country.

We know the concept didn't exist. We know there are incumbents already in this industry. So we know the challenges ahead. But what kept us excited was the impact that this category can create.

How does Rapido differentiate itself from competitors like Ola and Uber? Could you share a personal experience that highlights this difference?

The business model plus the businesses that we operate combined acts as a differentiator from the consumer experience and the pricing point of view. A consumer gets an experience better than the competitor by paying the less cost, the less price for the ride. And why is it possible? because we reduced the price by claiming fewer commissions. And hence, our pricing is less from the consumer side. And why we charge less commission is because our cost structure supports it.

So all these are interlinked where your pricing is less, your commissions are less, but the driver still makes more money and hence the customers are also happy, the captains are also happy and the platform is also happy.

The problem of penetration in tier 2 and tier 3 cities is the same for quick commerce as well. Even industry giants are trying to penetrate these markets. Do you have any plans to enter the quick commerce sector and increase penetration in tier two and tier three cities?

We are seeing huge growth opportunities in tier 2 and tier 3 cities as well, because fundamentally, people need to move and our ticket sizes are low. We currently handle logistics only for food, but we are entering the quick commerce space as well. So, we will be powering quick commerce platforms as their logistics partner, regardless of the city. We will launch in every city that our clients require. Right now, we already provide food delivery services in tier 2 and tier 3 cities for Swiggy and ONDC.

How do you maintain the demand and the supply you are giving? And what is the feedback mechanism apart from your app?

We drive auto-rickshaws, bikes, and cabs ourselves to get feedback from consumers. We also use the platform to commute as users on a regular basis. This allows us to gather in-person feedback from both customers and captains, which helps us identify challenges and develop our next steps.

Regarding the customer feedback we discussed, have there been any changes to the company’s policies or delivery mechanisms as a result?

Consumers are willing to pay more to get a ride when it is raining or when they are in a hurry. Sometimes, they feel our prices are high and want more control over the pricing. Therefore, we have now given customers full control over the pricing. This change came from feedback indicating that our pricing does not always reflect their needs.

You may be aware of a case filed against Rapido concerning the auditing of provisions related to persons with disabilities. The Delhi High Court directed you to file a report on the auditing. Can you provide insight into the case and Rapido's response?

The court has asked us to provide an audit to determine whether our app is user-friendly for individuals with disabilities. We will respond to this request and share the audit. Some screens in our app are not currently accessible for users with disabilities, and we plan to make changes to address this.

Ola, Uber, and Rapido are all involved, but none of the other companies attended the hearing—only Rapido was present because we care about this issue. We want to improve based on feedback from various authorities and users. We are happy to incorporate any feedback we receive.

We will be making significant improvements to enhance user-friendliness. While most screens are already accessible, there are a few that are not user-friendly for certain segments of users, and we will address these issues soon.

Coming from user-friendly to eco-friendly, how does Rapido address sustainability and environmental concerns?

There are a few cities already, where our EV penetration is significant. Take Delhi as an example. Already 25 per cent of our rides happen on EVs and we want to make it 100 per cent in the next year. In Bangalore, we also run electric three-wheelers where we operate and run a few of the autos to show the drivers that EV autos can work, to show fleet operators that it is a profitable business so that we can build the ecosystem around that.

Some city's penetration is much higher because of the ecosystem compared to other cities, but overall as a team, we are pretty aggressive on turning rides into EV rides, especially two-wheelers and three-wheelers and four wheelers, because of the partnership that we have with fleet operators.

Are you planning to totally shift to EVs in coming years?

It will be a natural progression. So we'll be working with fleet operators and the ecosystem to convert an existing vehicle to an EV. But it will go at a pace which is faster than normal private vehicles or commute vehicles. But it will happen year on year. More the time.

Rapido is now a unicorn. So, when may we expect IPO?

Everything has its time. But as of now, not a huge focus to list. The idea is to keep growing and keep increasing the penetration and at the right time we will be listing. So no immediate plans as such.

What is one piece of advice you would like to give to budding leaders in the industry?

One important thing is that we need to stay true to our vision and the purpose for which we started. When you are true to your cause and your beliefs, it becomes easier for your teams to make decisions independently and continue solving problems. I believe this is what has shaped Rapido into what it is today. We are committed to the impact we are creating and to the scale of employment we are generating. That’s the advice I would offer to leaders.

You had a startup before Rapido. How did you utilise that experience? And in the last 10 years, have you ever felt like giving up? If so, when?

Rapido’s journey has not always been smooth. We faced numerous challenges, including intense competition, difficulties in raising funds, and the impact of Covid-19. Out of the nine years Rapido has been in operation, at least six and a half years were tough, while only two and a half years were relatively good.

However, hearing stories from our captains and seeing the impact we make—particularly in addressing India’s significant issue of unemployment—keeps us motivated. It reminds us that the challenges are worth enduring because we are tackling one of the country’s toughest and most important problems. What could be more rewarding than contributing to such a significant national impact?

Is there anything you would like to share about Rapido’s future or your approach to leadership?

We believe in investing in people and giving them opportunities, and that’s a core part of Rapido’s story. On our leadership team, the average tenure is over four to five years. Within the company, employees appreciate the impact we’re making and are eager to be part of the cause we support. This is something we are truly proud of.

Navneet Singh

BW Reporters The author is a trainee correspondent with BW Businessworld