Rapido has expanded its food delivery venture, Ownly, to Hyderabad, aiming to challenge established players like Zomato and Swiggy with a zero-commission model. By leveraging its existing bike-taxi logistics network, the company seeks to reduce delivery costs and improve profitability. Investors may track how this expansion impacts the competitive food delivery landscape and whether the startup can scale its low-cost strategy effectively.
Rapido, the bike-taxi service provider, has officially expanded its food delivery platform, Ownly, to the Hyderabad market. This move marks the company’s second major launch after its initial pilot in Bengaluru, where it currently processes over 50,000 orders daily. The launch in Hyderabad includes the onboarding of 10,000 restaurants, with the company aiming to triple this count as it scales operations.
Targeting the Value Segment
The food delivery sector in India is currently dominated by two major players, Zomato and Swiggy. Ownly is attempting to differentiate itself by targeting a lower average order value of approximately ₹250, compared to the ₹400 to ₹420 range typically seen with industry leaders. The company’s strategy revolves around a zero-commission model, relying on consumer-paid delivery fees rather than charging commissions to restaurants. While these fees are not yet implemented in Bengaluru, leadership has indicated they will be introduced as order volumes grow.
Logistics Advantage
A critical factor in the food delivery business is the cost of last-mile logistics, which typically accounts for 85% to 90% of an aggregator's operational expenses. By using its existing bike-taxi technology stack and fleet, Rapido aims to lower these costs without needing to build a completely new, capital-intensive infrastructure from scratch. This focus on leveraging current assets is intended to help the company maintain thinner margins while keeping prices competitive for customers.
Market Challenges and Expansion
While the model focuses on cost-efficiency, the food delivery space is highly competitive. Scaling a zero-commission model requires massive order volume to be sustainable, and the company will need to maintain high delivery speeds to retain customers. Although the firm has announced plans to enter other major cities, including Delhi NCR, Mumbai, Pune, Kolkata, Ahmedabad, and Surat by the next quarter, it has clarified that it is not prioritizing quick-commerce or 10-minute delivery promises. The company maintains that it treats food delivery as a natural extension of its core marketplace.
Future Outlook
Rapido has stated that it expects to reach company-level profitability by the next financial year. While an initial public offering is reportedly not on the immediate agenda, the company’s ability to manage its cash burn while entering new markets remains a key area for analysis. As the firm expands into more cities, monitorables for observers include its ability to maintain delivery quality without the high-cost structures of larger peers, its success in customer retention, and the timing of its shift toward charging full delivery fees as it seeks to stabilize unit economics.