Rapido entered the taxi aggregator space on Tuesday with the announcement of the launch of its new taxi service, ‘Rapid Cabs’. The company already offers taxi bikes and three-wheeled passengers to its existing customers. With the launch of the taxi service, Rapido will now be in close competition with the leading players in the taxi aggregator market, Ola and Uber. Other players in the market such as BluSmart and InDrive based on electric vehicles (EV) are also looking to enter the market but have a limited presence.
Rapido will soon launch a taxi service
Rapido launched its taxi service about a month ago in Hyderabad and said the pilot had a “fantastic” start. Online taxi services in India is estimated to be worth Rs 30.72 billion in FY 2020 and is expected to witness a compound annual growth rate (CAGR) of 12.93% between FY 2021 and 2023 to reach a value of of Rs 55.15 billion by the end of the next fiscal year. There is a huge untapped market potential in this sector. Ola and Uber are the two most prominent players in the ride-sharing space in India and have also established themselves as the top choice for taxi services in India. Before they entered the market, the taxi industry was largely unorganized and run by individual taxi operators.
While it may not be the first mover in the industry, Rapido can rely on its existing clients and the ever-growing demand for these services. It may also aim to offer a better travel experience as neither Ola nor Uber have been able to provide consistent quality in terms of affordability, proximity to taxis, professional drivers and above all safety. The two companies are also at odds with drivers who have long demanded better compensation. Rapido Cabs started with a fleet of 100,000 vehicles. The company also aims to address the issue of rewarding Uber and Ola drivers.
Rapido currently operates in more than 100 cities and has almost 10 million customers and 100 million rides. The company has raised approximately $310 million to date and is backed by Nexus Venture Partners, WestBridge Capital and others. Although the company has yet to announce its FY23 financial results, the FY22 numbers show that the company is facing many challenges. The company’s revenue from operations grew 91.5% in FY22 to Rs 144.8 crore from Rs 75.6 crore in the previous year. However, to achieve this 90% growth, the company had to spend more than twice as much as the previous year. As a result, the company’s losses in FY22 widened 2.6 times to Rs 439 crore. The company’s cash outflows in FY22 also increased by 2 times to Rs 437 crore.
Categories: Trends
Source: HIS Education