Can Rapido’s Big Leap into Food Delivery Disrupt the Swiggy-Zomato Duopoly?

In India’s fast-growing food delivery market, two giants, Zomato and Swiggy, have long dominated the space. With a combined market share of over 95%, they have left very little room for new players. 

However, a new competitor is now entering the scene. Rapido, known for its two-wheeler ride-hailing services, is preparing to roll out its food delivery service in Bengaluru. The mission? To offer affordable meals with transparent pricing.

Source: Moneycontrol

Rapido’s entry into the food delivery sector could disrupt the dominance of Zomato and Swiggy. Unlike past failures by Uber and Ola, Rapido’s network of four million riders positions it as a strong challenger. If executed well, it could impact the current take-rates, percentages charged on each order, and affect the profitability of existing players. 

Source: Moneycontrol

Let’s understand how Rapido plans to achieve this and whether it can truly disrupt the current landscape.

Introducing “Ownly” – Rapido’s Food Delivery Brand

According to Rapido’s internal pitch to restaurant partners, the food delivery business is being introduced under the name “Ownly.” While this name may change in the future, the company’s vision is clear: it aims to make food delivery more accessible and affordable for everyone.

The idea behind “Ownly” is rooted in fair pricing and transparency, two things that many believe have been missing from food delivery platforms for quite some time.

Core Commitments and Key Features

Zero Commission Promise	Rapido pledges to remain a zero-commission platform for restaurant partners.
Wide Operational Reach	Currently operating in 500 Indian cities Conducting 4 million rides monthly Serves 30 million active users
Transparent Delivery Pricing	– Orders of ₹100 and Below: Delivery fee fixed at ₹20- Orders Above ₹100: Flat delivery charge of ₹25 + GST- No Hidden Costs for Restaurants: Restaurants will only pay the delivery fee + GST—no other platform charges.
Future Monetization Strategy	Subscription Model in Pipeline: Rapido may introduce a flat subscription fee for restaurants in the future, replacing variable commissions.
Tools & Restaurant Support	Discounting Support: Restaurants will get tools to offer discounts but Rapido will not use discounts to acquire users aggressively. Data Sharing for Growth: Restaurants will receive user insights and data to help run their own marketing campaigns. Affordable Meal Mandate: Each restaurant must offer at least 4 meals priced at ₹150 or less.
Focus on ‘Bharat’ and Inclusion	Target Audience: Rapido aims to cater to first-time users and regions with limited access to affordable online food. Mission: Provide fairly priced meals and make food delivery accessible to a broader audience across India.

Source: Moneycontrol

The Problem with Current Food Delivery Giants

Zomato processes more than 2.5 million food orders daily, with Swiggy’s count reaching at over 2 million. Together, they dominate the $8 billion food delivery market with a combined 95% share. In terms of market share for the first quarter of fiscal year 2025 (Q1 FY25), Zomato leads with 58%, while Swiggy holds 42%.

However, numerous restaurant owners have voiced their concerns about both platforms, pointing to issues such as:

• High commissions, often eating into their margins
  
• Preferential treatment for large or premium restaurants
  
• Expensive customer acquisition costs (CAC)
  
• Extra charges like packaging fees, delivery charges, and platform fees
  

These issues have forced smaller businesses to explore other options. Although some alternatives, such as Thrive (backed by Coca-Cola), were launched, most couldn’t sustain operations due to a lack of traction.

Even promising new platforms like ONDC (Open Network for Digital Commerce), Magicpin, Zepto Café, and Swish are still far from threatening the dominance of Swiggy and Zomato.

Rapido’s Strong Entry is Backed by Scale

What makes Rapido’s entry into the food delivery space particularly compelling is its robust existing customer base and infrastructure. Operating in over 500 cities, Rapido facilitates around 4 million rides each month and boasts approximately 30 million active users. 

This extensive reach provides the company with a solid foundation to develop a parallel food delivery network, leveraging its large fleet of bike riders, known as “captains”, who are already actively engaged in ride-sharing services across the country.

Zero Commission & Honest Pricing

One of Rapido’s biggest promises to restaurant partners is that it will charge zero commission for food delivery orders. Unlike other platforms that take a significant cut from each order, Rapido aims to ensure that restaurants retain a larger share of their earnings.

But the innovation doesn’t stop there.

Rapido plans to:

• Ban packaging charges from being billed separately.
  
• Do not allow restaurants to inflate prices online.
  
• Avoid offering discounts or ad-based customer acquisition tactics.
  

In simple terms, the price you see online will be the same as the price in-store—a welcome move for both customers and restaurant partners.

Addressing the Issue of Marked-Up Food Prices

One of the major complaints from users ordering food online is that the prices are often inflated by as much as 40%. This has become a barrier, especially for price-sensitive users in smaller towns and cities.

Rapido aims to eliminate price markups. As per its plan, the cost of a dish (excluding GST) will be the exact amount the customer pays, with no extra charges from either Rapido or the restaurant. This straightforward pricing approach makes food more affordable and transparent, helping to include a wider section of the Indian population that is often priced out by high online food delivery costs.

Delivery Charges: Simple and Transparent

Rapido’s model also simplifies delivery charges:

• For food orders above ₹100: Delivery fee of ₹25 + GST
  
• For food orders ₹100 or below: Delivery fee of ₹20 + GST
  

But here’s the twist—restaurants will bear the delivery cost, not the customers.

This makes it even more appealing to customers, especially during the initial launch. Swiggy and Zomato, on the other hand, add multiple extra fees including:

• Platform fee
  
• Delivery charges
  
• Packaging costs
  
• GST on all the above
  

All these additions often make food significantly more expensive. Rapido, with its flat and low-cost model, looks set to disrupt this pattern.

Source: Moneycontrol

How Will Rapido Make Money?

Offering zero commission and lower costs sounds great, but it naturally raises the question: how will Rapido generate revenue?

The company has a plan.

1. Subscription-Based Model:
   Rapido intends to charge restaurants a flat monthly subscription fee once it reaches a meaningful scale. This model replaces the traditional commission model.
   
2. High-Volume Strategy:
   Rapido aims to tap into a large number of users from “Bharat”, the tier 2, 3, and 4 cities where food delivery is still a luxury. By offering affordable meals, it hopes to drive more frequent orders and increase order volumes.
   
3. Affordable Meal Mandate:
   Rapido asks its restaurant partners to list at least four dishes under ₹150. This strategy not only boosts affordability but also encourages customers to order regularly.
   

Competing on Value, Not Just Scale

While Zomato and Swiggy are constantly working to increase their average order value (AOV), Rapido is going in the opposite direction. It wants to attract more customers by offering lower-priced meals. This shift in approach could significantly disrupt the food delivery ecosystem, particularly among customers who have been priced out of the system.

Extra Benefits for Restaurants

Apart from cost savings, Rapido also offers several value-added services for restaurant partners:

• Option to advertise on the platform
  
• Access to customer data to run personalized marketing campaigns
  
• No packaging cost obligations
  
• Fair and transparent price policies
  

This creates a more business-friendly environment, empowering small and medium-sized restaurants to compete more effectively.

Rapido’s Pilot Program in Bengaluru

Rapido is kicking off a pilot project in Bengaluru to test the waters. This initiative gives the company a chance to experiment, refine its systems, and gather feedback from both users and restaurant partners. According to a company spokesperson, the goal of this trial is to assess whether Rapido can deliver greater value to consumers and partners. Early indicators are encouraging, with restaurant owners welcoming the arrival of a strong third contender in the food delivery space.

Will Rapido Succeed?

It’s still early days, and the food delivery space is tough. Previous players like Thrive tried and failed. Others like ONDC and Zepto Cafe are still finding their footing.

But Rapido has some key advantages:

• A massive existing user base
  
• A strong delivery fleet infrastructure
  
• A bold, customer-first pricing model
  
• A clear long-term revenue strategy
  

Whether it can truly disrupt the market or will eventually adopt a traditional commission-based model remains to be seen. There’s also an interesting twist, Swiggy is an investor in Rapido, which could complicate things if the food delivery service takes off.

If Rapido succeeds, it may force Swiggy and Zomato to rethink their pricing and commission models. But whether it can scale sustainably and deliver on its ambitious goals will depend on its execution in the months ahead.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.