Ride-hailing app Rapido is gearing up to challenge the dominance of Zomato and Swiggy in the food delivery market. According to a report by Economic Times, Rapido is in discussions with restaurateurs to add food delivery as a service on its platform, aiming to disrupt the current commission structures charged by the leading food delivery giants.
The report also adds that the senior Rapido executives have been meeting with restaurant owners to develop a business model that can compete with Zomato and Swiggy. These discussions are still in the early stages, and the plans have not been finalized yet.
Rapido already offers delivery services for individual restaurants using its two-wheeler fleet and also does food delivery on behalf of Swiggy, which is an investor in the company. Notably, Swiggy's investment in Rapido did not come with an exclusivity clause.
Rapido, which began operations in 2015 as a

bike-taxi platform

, has become the second-largest player in India's competitive ride-hailing space. The company is looking to chart its next phase of growth, having crossed $1 billion in annualised gross merchandise value (GMV) from ride-hailing. Rapido is present in over 100 cities and plans to expand its service to 500 cities across India this year. In February, the company raised $30 million from Dutch investor Prosus as an extension of its $200 million round last year led by WestBridge Capital.

Rapido's potential entry into the food delivery segment comes at a time when the sector is experiencing slowing growth and disputes over commission rates between restaurants and aggregators. Zomato founder and CEO Deepinder Goyal recently acknowledged systemic issues in the food delivery segment, which have led to its slowdown. Despite this, Zomato and Swiggy continue to dominate the market, with Zomato holding a 57.1% market share according to brokerage firm Bernstein.
The food delivery space has seen a surge of new players and services, especially for 10-minute food delivery. Companies like Zepto and Zomato-owned Blinkit, along with standalone players such as Accel-backed Swish, have entered the market. The launch of 10-minute food delivery by Zomato and Swiggy has faced opposition from restaurateurs represented by the National Restaurants Association of India (NRAI), which is advocating for a third player to challenge the duopoly.
Rapido's decision to enter the food delivery market is part of its broader strategy to diversify its services and boost revenue. The company aims to leverage its existing two-wheeler fleet for hyperlocal deliveries and capitalise on the growing demand for quick commerce.