Daybreak - Rapido wants to make food delivery affordable. But can its restaurant-first strategy dish out profits too?

Episode Date: June 12, 2025

For nearly a decade, Swiggy and Zomato have fed our hunger and dominated prime real estate on our phone screens, leaving very little room for any serious challengers.Most who tried to break in got their fingers burnt before they even got started. But now, a new player has decided to throw its hat into the ring.  This is a player that has some experience taking on titans, though the last time around it was in a completely different space. Rapido – the Bangalore-based startup that quietly muscled its way into India’s ride-hailing market  – is all set to launch its own a food delivery platform called 'Ownly'. Sure, Rapido’s mission of zero commission, equal pricing in offline and online, and meals as low as ₹150 looks compelling,but the real question is: how will Rapido make money? Tune in. Want to attend The Ken's next event on health, fitness and wellness? Buy tickets here. Here's your chance to help us shape the conversation: https://theken.typeform.com/to/bZhqWl2g

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission. We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture,

how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd.

To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Finally, it looks like we have a real contender to challenge the Swiggy Zomato Duopoly in India. For nearly a decade, the two food delivery giants have fed our hunger and dominated prime real estate on our phone screens, leaving very little room for any. serious challengers.

Most who tried to break in got their fingers burnt before they even really got started. And these were big names, the likes of Uber Eats or Coca-Cola backed Thrive. Even OLA has dipped its toes in the big, bad world of 10-minute food delivery through the government-backed open network for digital commerce, better known as the ONDC platform. But most of these attempts have either crashed and burned, as in the case of Uber Eats and Thrive, or are in their very nascent stages and aren't even remotely close to taking on the Swiggyzomat or doopoly. But now?

Now a new player has decided to throw its hat into the ring. And this is a player that has some experience taking on Titans, though the last time around, it was in a completely different space. I'm talking about Rapido, the Bangal-based startup that quietly muscled its way into India's ride-hailing market long after Ola and Uber had called Dibbs. According to a proposal to restauranteurs that surfaced earlier this week, the ride-hailing unicorn is all set to launch its own food delivery platform called,

well, only with a W. It plans to launch its pilot in Bangal later this month. Now, Rapido's advantage is clear. It is its 4 million strong army of riders in 500 Indian cities, not to mention its 30 million active monthly users. So, it has a well-year-old. established logistics network in place, which is a critical component that has made or broken players in the past. But beyond that, Rapido has taken a page out of the ride-hailing playbook. It wants to

undercut Swiggy and Zomato by going after commissions. Just as it once attracted drivers with better margins, it is now hoping to lure restaurants by offering lower fees than Swiggy or Zomato. Multiple news reports suggest that Rapido will not be charged. charging a commission and also will not have a platform fee and packaging costs that are the norm on Zomato and Swiggy. Food often costs up to 40% more online and that has been a big reason why many people avoid ordering. But Rapido says that it is here to change that. Sure, the mission sounds noble and its pilot model with zero commission, equal pricing in offline and online and meals as low as $150.50 looks quite compelling.

but the real question is how will Rapido make money? Hello and welcome to Daybreak, a business podcast from the Ken. I'm your host Nick Dha. And I'm Rahil and we don't usually chase the news cycle, but today we are. Every day or two weeks, we come to you with one new story that is worth understanding and worth your time. Today is Friday the 13th of June. Rapido's strategy with only is fairly straightforward. Keep cost low for both customers and.

and restaurants. Now, anyone who's ever ordered food online knows, you're not just paying for the meal. There's the delivery fee, a platform fee, packaging charges and of course taxes. And then there are also the less visible markups like restaurants inflating menu prices to offset platform commissions. By the time you check out, your $250 meal might be pushing $400. So with only, Rapido says it wants to strip away as many of the money. these add-ons as possible. Lower commissions for restaurants, fewer hidden charges for customers, and a more transparent fee structure overall. Reports say that Rapido's only will charge 10 rupees for orders under 100 in total value, with customers paying 20 rupees as delivery fee for

every order. For orders below 400, the fee will be rupees 25 and rupees 50 on orders above 400. If you do the math, the commission rate is significantly lower than what in incumbents, Zomato and Swiggy charge. This pricing model is largely based on multiple rounds of conversations between Rapido and the National Restaurant Association of India, or NRAI, which represents over 5 lakh restaurants across the country. Now, the body has been working with a ride-haling platform for six months now, and it reportedly pushed Rapido to explore a new, more sustainable business model for the sector.

In its note to NRAI about only, RAPADO said it believes ordering food online is a very different experience from eating out and customers expect different things from it. So it looked for solutions that fit this very unique experience. It also said it thinks the food delivery market can only grow if there are big changes, either in how much it costs to operate or in what's being offered to customers. But still, why food delivery? Well, things have been really looking up for Rapido. Its currently value at over a billion dollars and recently raised a fresh round of investment worth $30 million from process on top of a $200 million round led by Westbridge Capital.

For Rapido, food delivery is a strategic next step, one that makes use of its massive fleet, keeps riders busier and gives restaurants and customers a reason to look beyond the usual suspects. But while that makes sense in theory, pulling it off will be a whole other ballgame. While its lower commission model may appeal to certain smaller restaurants in the short term, it will probably have to raise the rates in the long term to actually sustain operations. Now, this is a cut-throat industry and the economics are pretty harsh. Swigy and Zomato still have a decade over rapido.

There's also something more that Swiggy has. You'll find out in the next section. Hi, I am briefly pausing this episode to make a very special announcement. On June 21st at the Bangalore International Centre, the Ken is bringing together a pretty extraordinary panel for a one-of-a-kind discussion on how we can lead healthier and happier lives. We'll be joined by Olympic swimmer Nisha Millett, vice-chairman of the Narayana Health Hospital Group, Virgin Chetty,

and finally, Dr. Syriac Abbey Phillips, aka the Liver Dog. Join us for what promises to be an insane. insightful, vibrant discussion that covers a whole range of topics. From how to get great sleep, to attaining mental clarity through workouts, to which supplements matter, to how to take care of aging parents and growing children, you get the drift. That's not all. We also want your help to shape this discussion. So send us your questions for Nisha, Vireen and the liver doctor, and we will take care

of the rest. All the details about the event, where to purchase tickets, and how to submit your questions will be in the show notes. We hope to see you there. And with that out of the way, let's get back to the episode. You see, last mile delivery is the lifeblood of any food delivery business. But at the same time, it is also its biggest pain point. Pretty much every major platform in the space has long struggled with a chronic shortage

of delivery partners. It is not an easy problem to solve. You see, because most staffers are gig workers, which means it is in their interest to work for the highest paying platform at any given point of time. And the bidding wars for delivery personnel end up driving costs for these platforms. But then, two years ago, Swicky thought that it had cracked the code. It gave delivery personnel the option to do bike taxi rides during non-peak hours, and it incentivized them for doing more work in a day.

The goal was to have a better shot at retaining them, particularly during peak hours, so during breakfast, lunch and dinner time. How was Swiggy able to do this? Now, here is where it gets fun. You see, Swiggy made a 950 crore-rupy investment in none other than Rapido. It ended up with a sweet 15% stake in the company as a result, making it the second largest shareholder after investment firm, Westbridge Capital. In January 2023, the food delivery giant ended up.

up carrying out a pilot run in Chennai to understand whether delivery partners were even interested in the service. Swiggy also wanted to see whether it would lead to an increase in earnings for them. But the results were mixed. While many of its delivery partners did see an uptick in their earnings, it wasn't quite as successful as they had hoped it would be. Some delivery partners said they weren't really comfortable with the new experience. Because you see, at the end of the day, food delivery is an extremely expensive proposition. Customers expect low delivery fee, fast service and constant discounts. But the cost of delivering a single meal is disproportionately high.

You need a vast fleet and constant incentives to keep delivery partners active. And that is where most possible challengers have failed. But perhaps the most aggrieved party in all of this are the restores. They are fuming. They are already in a business with infamously low margins, but on top of that, they have to deal with commissions from the likes of Swiggy and Zomato that can go as high as 25 to 30% per order. Now, more players would mean more competition in the market,

which is always great for customers. And for restores, rapidos only could finally mean a level playing field. But there is still a big question that remains, unanswered. How will Rapido make money? Stay tuned to find out. Only zero commission model and affordable meals might sound great for restaurants and customers. But Rapido is still running a business. And right now, it is burning through nearly $5 million a month. So keeping those costs in check or actually turning a profit is going to be critical. If you look at the proposal Rapido Center restaurant partners, it seems like the company isn't really chasing commissions. It's more

interested in the longer game. Rapido says once it brings about what it calls real structural change in delivery pricing across the industry, it plans to introduce a flat subscription fee for restaurants. No per-order charges, just a consistent monthly payment. It's a model that mirrors what Rapido already does in its right healing business. But that is not all. Rapido is also betting big on volume. The idea is simple.

Make food affordable enough to attract an entirely new customer base, which is people who have avoided ordering online because prices were just too high. To ensure this actually happens, Rapido will require its restaurant partners to list at least four meals priced at $150 or less. And that is their way of reaching value-conscious users and increasing repeat orders. Their strategy stands in stark contrasts. to Swiggy and Zamato who are constantly working to increase average order values.

Rapido is actually going the other way with low-cost meals and high-frequency orders. And there is also a third revenue stream in the works. Rapido is planning to let restores advertise on the platform and access customer data to run targeted marketing campaigns. And that opens the door for future monetization without charging restores a cut off every sale. Also, let us not forget that RAPido actually has some experience in taking on established giants like Ola and Uber with zero commission models in the ride healing sector. So, yes, its model for food delivery is bold, with zero commissions, affordability and scale-first economics. But will it really end up creating a more sustainable model in this space?

We will have to wait and watch. Daybreak is produced from the Newsroom of the Ken, India's first subscribers. FesCriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. Head to the Ken.com and click on the red subscribe button on the top of the Ken website. Today's episode was hosted and produced by Rahil Filippoz and I, Sinkda Sharma, and it was edited by Rajiv Sien.