Bike Taxi segment contributes 78% to the overall business: Aravind Sanka, Rapido

Adgully is back with a new edition of its annual feature – TRENDING NOW – where we present the strategies and views of a cross-section of industry leaders as they go about reclaiming lost time and market opportunities and build for a stronger future, armed with the lessons of the pandemic period.

Over the last few weeks, Trending Now has been bringing insights from industry leaders on how their organisations are gearing up to seize the opportunities in 2022, break through the Covid disruptions and find growth and remain resilient.

In conversation with Adgully, Aravind Sanka, Co-Founder, Rapido, speaks about the growth of the Bike-Taxi segment in India, the emerging trends and sustainability, challenges and opportunities in the year ahead, the growing importance of non-metro cities and more.

What are the trends that you expect to dominate in your sector in 2022?

With the series of waves of the pandemic, there have been conscious consumer preferences shift towards affordable personal mobility solutions such as entry-level cars, two-wheelers, and ride-hailing. This holds true for metro cities as well as Tier 2 and 3 cities and beyond. Further, due to the increased traffic jams and poor road conditions, small-format mobility such as two-wheelers and three-wheelers has also witnessed an uptick in recent months, particularly for hyper-local travel. A significant step would be a paradigm shift to EVs. As the infrastructure improves, we are looking to expand our offerings and convert 25% of the existing fleet into EVs by 2025.

Consumers are progressively depending on outsourced models for commuting and delivery, alike, rather than owning private vehicles. Hence, it is safe to conclude that the “Mobility-as-a-Service” model is making its mark and gaining popularity owing to the growing preference for an asset-light lifestyle.

App-based ride-hailing services across segments such as two-wheelers, three-wheelers, and four-wheelers are becoming preferred modes of travel. This is due to the safety and accountability it provides in commuting for the passengers. Witnessing the need for more mobility solutions for last-mile connectivity, we launched Rapido Auto in October 2020. The diversified segment has already served an exhaustive customer base of over 3.5 million through its nominally priced, high service efficiency model, even during the pandemic. Starting with 1.5 lakh autos, Rapido is fostering an ecosystem of an additional 1 lakh Auto Captains to provide alternative safe commuting solutions, pan-India.

Lastly, a focus on emerging trends would be incomplete without the mention of sustainability. India’s Carbon Dioxide emissions were 2.88 Gigatons in 2021. As a country, collectively, India is pegging to reduce its carbon emissions by a whopping 22% by 2030. It is amply clear that this target cannot be achieved without the contribution of the mobility sector. Ridesharing is one such means to cut down on carbon emissions by reducing the number of vehicles on the road.

What are the challenges and new opportunities that you see emerging in the year ahead?

The ride-hailing landscape in India is largely underserved, and yet holds great potential to sustain, as well as, expand. As per the estimates by Goldman Sachs, the global ride-hailing industry is expected to grow eightfold to $285 billion by 2030, making it an incredibly lucrative market. This presents an unparalleled scope for start-ups to emerge in this sector. Presently, a host of service providers are, typically, focusing on metro cities alone. However, it is critical to recognise the untapped opportunities that lie in the small markets of tier 1, 2, and 3 cities especially, for small-format mobility. Online ride-hailing apps will peak out through the unprecedented growth prompted by consumers’ inclination towards both bikes, and taxis. This trend is expected to revolutionise mobility services provided by the new-age operators.

We have witnessed an emerging need for affordable, accessible, and multi-stop rides in recent times, especially by the high usage customer segment. With Rapido Rental, we aim to address the need of such users who have a use case of multi-point travel. This can range from a short stopover to run errands at a local shop, to longer or multiple stops related to professional or personal reasons such as for comprehensive shopping, and house hunting, among others. We hope to provide a superior user experience and create a mutually beneficial symbiotic association for our customers and our driver-partners, known as Captains.

The bike-taxi industry in India requires an impetus from the Central, as well as all the State Governments in the form of streamlined regulations. Rapido, being the largest bike-taxi service provider in the country, is working closely with various State Governments to spread awareness on the needs and benefits of a robust bike taxi infrastructure for India, especially to fill the first and last-mile connectivity gaps.

Taking cognizance of the potential of small-format mobility, a multitude of State Governments have opened their doors to bike-taxis overall, as they adopt the new concept. For instance, states like Uttarakhand are working towards building a regulatory framework for allowing operations by bike-taxis across the state, built on the understanding that it will create over 20,000 jobs and at the same time, reduce traffic. With the rapid urbanisation and smart status of cities, we believe Bike Taxi is the future of intra-city transport with its strong last-mile connectivity value proposition.

How is this year’s turnout expected to be in this sector as compared to the last two years? How strong will this sector’s growth and recovery be compared to the last two years as well as the pre-Covid period?

The pandemic made businesses realise the growing importance of non-metro cities, a concept that Rapido pioneered its business upon. In addition, a successful business model cannot be developed without the advancement of integrated technology. In near-term as well as long-term, the start-ups will focus on customer satisfaction and maximising profits by deploying the right technologies. Given this backdrop, we leveraged advanced technology to enhance our service-deliveries, while keeping the customer interest at the core of every development.

We diversified our services to launch Rapido Local, a Person-to-Person on-demand delivery service, and Rapido Auto. While the latter provides a safe alternative mode of commute, the former enabled the exchange of groceries, food, and medicines, through contact-less deliveries and without the customers facing the hassles of stepping out during the pandemic. With our proactive approach, we were not only able to sustain the business but also clocked 25% increase in revenue, compared to the pre-Covid peak month. Today, the Bike Taxi Segment contributes 78% to the overall business and holds a 60% market-share.