Riding On Back Of Bike-Taxi Servies, Rapido Pips Uber, Ola To Grab Market Share And Users

India's transportation landscape has seen a dramatic shift as homegrown Rapido, initially viewed as a niche bike-taxi operator, has captured nearly 50 per cent of the country's ride-hailing market. This positions the company ahead of established cab-hailing firms like Uber and Ola, thus, changing the dynamics of India's mobility sector, says a report by Times of India.

Two-Wheeler Drives Rapido's Share

Rapido's success is attributed to its focus on two-wheeler transportation services. This approach has impacted Ola's business operations while creating challenges for Uber in India, one of its most important global markets.

Also read: Uber CEO Names Rapido As India's Toughest Ride-Hailing Competitor, Not Ola

According to Sensor Tower data cited in a Citi Research report, as reported by Economic Times, Rapido overtook Uber in Android monthly active users (MAUs) in January 2024. By July, the gap had widened considerably, with Rapido achieving approximately 50 million MAUs compared to Uber's 30 million -- a big difference in India's Android-dominated smartphone ecosystem.

Market Share Distribution

The Bengaluru-headquartered firm secured dominance in the bike taxi segment, which traditionally generates higher transaction volumes than other categories. Rapido has also captured nearly 30 per cent of the four-wheeler cab market segment.

Meanwhile, Uber retains control of 50 per cent of the online four-wheeler cab market, with Ola securing the remaining portion. This market distribution explains Uber CEO Dara Khosrowshahi's recent acknowledgment of Rapido as the "tougher competition" when compared to Ola in the Indian market.

Uber's Price Reduction

Facing intensified competition, Uber has implemented conventional pricing strategies to counter Rapido's expansion. Sources familiar with the matter, as reported by ET, indicate that in key metropolitan areas including Bengaluru, Gurugram, and specific Mumbai zones where Rapido has demonstrated significant growth, Uber has implemented fare reductions ranging from 20-25 per cent.

Driver Subscription Model

In addition to fare adjustments, Uber has embraced Rapido's innovative approach by launching a subscription-based model for its driver partners. Under this system, drivers can opt to pay a fixed daily fee between Rs 120 and Rs 140 for unlimited platform access over a 24-hour period, replacing the traditional per-ride commission structure. During subscription periods, Uber deducts only the mandatory 5 per cent goods and services tax.

An industry investor with sector exposure was quoted as saying: "In India, Uber has often been more reactive than proactive over the last few years. Its recent fare cuts and driver incentives are responses to Rapido's rise…not fresh innovations that can shape the market. Rapido may be bleeding cash, but it is winning mindshare…and that can be harder to reclaim than market share."

Rapido's Focus On Sustainable Growth

Despite market speculation about aggressive expansion tactics, Rapido cofounder and CEO Aravind Sanka highlighted the company's commitment to sustainable development. Sanka was quoted as saying by ET: "The company will focus more on 'sustainable growth' than 'chasing market leadership at any cost'. The continued (user) engagement has strengthened our leadership across bike, auto and parcel services, built not on subsidies or price wars but on a captain-first and customer-focused approach. As we now expand into cabs, our priority is to scale responsibly by enhancing driver earnings, improving service quality and ensuring reliable, affordable mobility for all."

Rapido's Operational Expenses

Reports suggest Rapido's monthly operational expenditure reached $4-5 million (approximately Rs 40-45 crore) in early 2025, representing an increase following previous cost-optimisation initiatives. However, the company demonstrated improved financial management, with losses decreasing to Rs 17 crore in the July-September 2024 quarter, compared to Rs 74 crore during the corresponding period in the previous year.

Uber Makes Changes

Uber's focus has shifted to improving service reliability through specific performance targets. Company employees have disclosed that teams must ensure 60 per cent of booked rides reach completion, translating to fewer than four cancellations per ten bookings. 

"Right now, reliability hovers around 50-55 per cent," one employee revealed. "The target is 60 per cent, and there has been strong internal pressure to get there."

An Uber spokesperson responded to these figures, stating: "These numbers that you have cited are highly misleading or plain wrong."

Rival Impact

Companies like BluSmart exposed declining service standards at both Uber and homegrown Ola. BluSmart's all-electric fleet service gained traction among business travelers seeking reliable transportation. However, BluSmart discontinued operations due to financial constraints when founder Anmol Singh Jaggi encountered regulatory investigations concerning corporate governance.

Revenue Structure Comparison

Uber's commission structure of 30-35 per cent from drivers results in a net take rate approximately 6-7 percentage points higher than Rapido's, indicating reduced per-ride revenue for the Indian competitor.

Rapido's Diversification Plans

Following its success in urban transportation, Rapido is venturing into food delivery services, currently dominated by the Zomato-Swiggy duopoly -- a market where Uber previously struggled and ultimately withdrew.

Uber Eats was acquired by Zomato (now Eternal) in 2020 after experiencing significant losses and limited growth potential. This occurred as part of CEO Khosrowshahi's broader operational streamlining efforts.