How Rapido Works? Rapido Business Model and Intriguing Revenue Channels

Most people think Rapido is just a cheaper version of Uber on a motorbike. That framing misses everything interesting about the company.

Rapido grew 4.4 times over two fiscal years, with revenue rising from ₹145 crore in FY22 to ₹648 crore in FY24. By FY25, annual revenue crossed ₹1,000 crore. In July 2024, Rapido joined the unicorn club after raising $200 million in a Series E round at a $1.1 billion valuation.

None of that happened by copying Uber. It happened because Rapido made a set of very deliberate strategic choices that most ride-hailing companies refused to make.

This is a breakdown of exactly how Rapido works, how it makes money, and what any founder building an on-demand mobility startup can take from it.

What Is Rapido?

Rapido is an Indian ride-hailing service that primarily operates as a bike taxi aggregator. Its offerings also include auto rickshaw and taxicab hailing, parcel delivery, and third-party logistics. Founded in 2015, the company is based in Bengaluru and operates in over 100 cities.

The company was originally called theKarrier. Three founders, Aravind Sanka, Pavan Guntupalli, and SR Rishikesh, two of them IIT alumni, pivoted to two-wheeler taxis after identifying a gap no one else was filling: fast, affordable, intra-city commutes for the hundreds of millions of Indians who cannot afford or do not want to pay Ola and Uber prices every day.

That insight, solving a real daily problem for real daily commuters, is the foundation everything else is built on.

How Rapido Works: The Operational Flow

Rapido runs an asset-light aggregator model. It owns no bikes, no autos, no cabs. It connects two groups: passengers who need rides and Captains (Rapido's term for its drivers) who have vehicles and want to earn.

From a passenger's perspective, the experience is straightforward. You open the app, enter your pickup and drop location, see an upfront fare estimate, and confirm the booking. A nearby Captain accepts the ride. You see their name, photo, bike number, and rating in real time. They arrive with a spare helmet (mandatory under safety regulations), and you reach your destination faster than a cab because a bike navigates traffic differently. Average Rapido fares run ₹30 to ₹60 for short rides, compared to ₹120 to ₹250 for an equivalent Uber or Ola cab journey. Payment is cash, wallet, or UPI.

From a Captain's perspective, the process starts with registration on the Rapido Captain app. You upload your driving license, vehicle registration certificate, insurance, and Aadhaar card. Your vehicle cannot be older than 2010. Once verified, you go live, accept rides when you want, earn per ride, and receive a starter kit including helmet, raincoat, and safety guidelines from Rapido.

Rapido operates over 2 million rides daily. That volume, multiplied across low individual fares, is where the business becomes interesting.

Rapido's Business Model: The Two-Sided Marketplace

At its core, Rapido is a two-sided marketplace. Passengers need affordable, fast transport. Captains need steady income and flexible hours. Rapido sits in the middle, manages the matching, trust, and payments, and takes a cut.

What makes Rapido structurally different from Uber and Ola is where it chose to compete. While Uber and Ola were fighting a margin war in Tier 1 cities, Rapido was racing ahead in places where cabs rarely went, focusing on Tier 2 and Tier 3 markets where public transport is patchy and affordability is everything.

This was not an accident. Rapido deliberately targeted the daily commuter, the student, the office worker, the person who rides two or three times a day and will never pay ₹200 for a cab. By making its product an everyday necessity rather than an occasional convenience, Rapido built a usage frequency that Ola and Uber's cab products cannot match.

According to internal documents, Rapido has surpassed Ola to become the second-largest player in the ride-hailing market following Uber, across bike, auto, and cab segments. Autorickshaws contribute 40% of its GMV, with bikes and cabs each contributing 30%. In terms of ride volume, bike taxis account for over 50% of total rides.

Rapido's Revenue Model: How It Actually Makes Money

This is where Rapido gets genuinely interesting. Its revenue model is not static. It has evolved deliberately and the 2025 version looks meaningfully different from what it started with.

1. Bike Ride Commissions

The original and still active model for bike rides. Rapido charges 15 to 20% commission on every ride booked through the platform. If a bike ride costs ₹100, the Captain gets approximately ₹80 to ₹85, while Rapido retains the rest. Bike ride commissions account for roughly 45% of Rapido's total revenue.

With millions of rides per day, even a small per-ride cut compounds into a significant revenue stream fast.

2. The SaaS Subscription Model (The Big Shift)

This is the move that sets Rapido apart from every other ride-hailing company operating in India today.

As of February 2025, Rapido has shifted to a SaaS model for cabs and autos, removing per-ride commissions for those Captains. Drivers now pay a subscription fee upfront and keep 100% of their fares.

Here is how the fees break down: Auto Captains pay a dynamic daily login fee ranging from ₹9 to ₹29. In exchange, they can undertake unlimited rides without any additional commission charges. Cab drivers pay a monthly subscription fee of ₹500, but only once their monthly earnings exceed ₹10,000.

This model does something clever for both sides. Captains know their exact daily cost upfront, keep everything they earn above it, and have real income predictability. Rapido gets a fixed, steady revenue stream that does not depend on ride volumes fluctuating hour to hour. After introducing the SaaS model, Rapido saw a 20% increase in the number of Captains opting into the platform.

No other major ride-hailing platform in India has made this move at scale. It is a structural differentiator that improves driver retention and creates a more predictable cost structure for the company simultaneously.

3. Delivery and Logistics (Rapido Local)

Rapido Local is the company's parcel delivery service for both businesses and individuals. It lets local shops and people send documents, food, or other small items across the city, using the same Captain network that handles passenger rides.

This is an underappreciated part of the model. The same Captain who drops a passenger at work in the morning can deliver a package at noon. The infrastructure is already paid for by passenger rides. Delivery revenue is incremental on top of it. Revenue from delivery services reached ₹265 crore in FY24, growing 39.5% year over year.

4. B2B and Corporate Accounts

Rapido for Business serves companies through corporate subscription models where companies pay for employee commute solutions or bulk logistics, providing consistent B2B revenue regardless of passenger demand.

Corporate clients are less price-sensitive, book in higher volumes, and churn less than individual consumers. This makes B2B a margin-accretive segment for the platform.

5. In-App Advertising and Brand Partnerships

Rapido earns through in-app advertisements targeted based on user data, as well as brand partnerships including co-promotion deals with financial and consumer brands. With a user base of over 17 million monthly passengers, the advertising surface is meaningful even if it is not the largest revenue line.

The Numbers: Rapido's Financial Progress

The financial trajectory tells a clear story of a business that figured out how to grow without burning proportionally more cash.

Revenue from operations grew 46.3% to ₹648 crore in FY24 from ₹443 crore in FY23. Total expenses fell 9% to ₹1,066 crore from ₹1,172 crore, and losses narrowed 45% to ₹371 crore from ₹675 crore in FY23. By FY25, revenue crossed ₹1,000 crore.

The cost reduction came primarily from managing driver incentives more efficiently. Incentives paid to partners were the largest cost center, accounting for 43% of total expenses. Rapido cut this by 11% to ₹460 crore in FY24. Employee costs fell 16.9% and marketing fell 10.8% in the same period.

This is what operational maturity looks like in a marketplace business: revenue growing fast while cost growth decelerates.

What Rapido Did That Ola and Uber Did Not

Three decisions explain most of Rapido's growth.

It went where competitors did not bother. Tier 2 and Tier 3 cities have enormous commuter populations with no affordable app-based transport options. Rapido entered these markets early and built loyalty before Ola or Uber showed up with serious intent.

It made the product affordable enough to use every day. An Uber ride is a choice. A ₹40 Rapido ride on the same route is a habit. The frequency difference between an occasional-use product and a daily-use product is enormous when you are building a marketplace.

It restructured its relationship with Captains. The SaaS model is not just a revenue mechanism. It is a retention mechanism. Captains who earn more stay longer, serve more rides, and produce better experiences. Captains felt respected, earned more, and stuck around. This SaaS-style model for ride-hailing put the person first, and in India, where millions earn through the gig economy, that mattered.

Challenges Rapido Faces

No business model analysis is complete without the honest part.

Regulatory friction is real. Rapido has run into legal troubles in several locations where bike taxis are not legal. In February 2019, more than 200 bike taxis belonging to Rapido were seized in Bangalore after the state transport department declared bike taxis illegal. In February 2020, Rapido was banned across Assam for operating without a commercial license. Navigating state-by-state regulatory variation is an ongoing operational cost that companies in other markets rarely face at this scale.

Profitability is still ahead. Despite narrowing losses significantly, Rapido has not reached GAAP profitability at the company level. The path there runs through higher Captain subscription adoption, delivery business growth, and continued cost discipline.

Competition is intensifying. Uber has added bike taxis. Ola continues to invest in the segment. Namma Yatri operates a similar zero-commission model. None of these are existential threats given Rapido's lead, but they compress the room for error.

What Founders Building Mobility Startups Can Take From This

Rapido's story has concrete lessons, not just inspiration.

Affordability is a market-creation strategy, not just a pricing tactic. When you price for daily use, you build a fundamentally different business than when you price for occasional use. Volume and retention both improve.

Go deep in one segment before spreading wide. Rapido owned bike taxis before it touched autos. It owned autos before it launched cabs. Each expansion used existing Captain relationships and infrastructure. Sequential depth beats scattered expansion.

Your relationship with supply matters as much as your relationship with demand. The SaaS model is the clearest example of this. Rapido improved Captain retention by changing the economic relationship, not by spending more on incentives. That is a leverage point most founders overlook.

Tier 2 and Tier 3 markets are not consolation prizes. They are where the next wave of app-based service businesses will be built. Less competition, high unmet demand, and strong word-of-mouth dynamics make them compelling places to launch and validate before scaling.

If you are building a bike taxi app, a cab booking platform, or any on-demand mobility product and want a technical foundation that already handles the core infrastructure, matching, payments, and Captain management, Brineweb's taxi and bike app platform gives you a production-ready starting point. You focus on market fit and supply acquisition. The infrastructure is already built.

The Future of Rapido

In August 2025, Rapido launched its food delivery app called Ownly, entering a market dominated by Swiggy and Zomato but with a structural cost advantage: its Captain network is already active, already paid for by the ride business, and can handle last-mile delivery without the fixed fleet costs its competitors carry.

The company is also investing in electric vehicle integration, women-only services through its Bike Pink product, and deeper metro city penetration. Its current valuation stands at $2.3 billion as of late 2025.

The trajectory points toward a multi-modal urban mobility company that uses its Captain network as a shared asset across rides, deliveries, and logistics, extracting more value from each Captain relationship than any single service vertical could generate alone.

Final Thought

Rapido is not an Uber clone that got lucky in India. It is a company that made deliberate choices about who to serve, where to compete, and how to structure its relationship with the people who power its supply. Those choices compounded into a unicorn.

The model is replicable in markets where affordable daily commuting is underserved, regulatory frameworks allow two-wheeler taxis, and smartphone penetration is growing. That describes a lot of the world.

If you are a founder looking to build in this space, start with the market problem, not the feature list. Rapido did not win because it had the best app. It won because it understood its users better than anyone else and structured its business to serve them sustainably.

Ready to build your own ride-hailing or bike taxi platform? Talk to the Brineweb team and get a free quote for a custom or white-labeled taxi app built for your market.