Rapido Eyes Completely New Platform For Food Delivery Business — Profit Exclusive

Rapido is starting a completely new online platform that will allow customers to order from its restaurant partners, two people directly aware of the matter told NDTV Profit.

Strategists working at Rapido's new platform are working with restaurant partners to enable optimal pricing, product mix and customer engagement as the levers of growth for the platform, one of the abovementioned people added.

Through the new platform, Rapido is looking to build up new cost structures in the food delivery space and improve food offerings that drive demand in the sector, another person directly involved in the project added.

The new platform will ask restaurants to pay delivery fees directly to the delivery partners and is also likely to offer the option of self-delivery at zero cost to restaurants that have their own delivery network, the abovementioned person said.

As reported earlier, Rapido has finalised a delivery fees structure with potential partner restaurants.

Rapido's D2C food delivery platform will also not be charging packaging costs to customers, and customers are unlikely to pay any extra costs other than GST. On top of this, partner restaurants are being asked to keep the same pricing for meals online as they are offline, the second person explained.

Rapido's new platform is also working with restaurant partners to ensure that they have at least four dishes priced below Rs 150 each, the first person said.

Rapido's push for entering the food delivery space has taken one more step forward as the cab aggregator has finalised a delivery fees model with potential partner restaurants.

While the platform is likely to work on a zero commission model, it will look to charge a flat subscription fee from restaurants once the business achieves certain scale.

"At Rapido, we are constantly looking at opportunities to scale our services and bring greater convenience to our users. In line with this vision, we are currently test piloting an online food delivery app in the city of Bangalore," the company said in an emailed response to NDTV Profit.

What A Meal On Rapido's New App Is Likely To Cost

In March, Rapido was meeting restaurateurs across India, as it was looking to add direct-to-consumer food delivery services to its application.

The Swiggy-backed bike taxi operator's discussions with restaurants were focused on payment models and the feasibility of delivery operations, people aware of the development had told NDTV Profit.

Rapido's proposed model of a flat delivery fee for food delivery is different from the commission-based models that aggregators like Swiggy Ltd. and Eternal Ltd.-owned Zomato use.

(Photo source: NDTV Profit)

Currently, commissions for restaurants, on both Swiggy and Zomato, range from 10% to 28%, industry insiders told NDTV Profit. On top of this, there are also payment gateway charges and GST that restaurants have to pay to the platforms. Average order value and number of orders also affect the commission charges, the industry insiders said. Added to this, a restaurant's brand identity that can also affect commissions.

Generally, larger chains or legendary brands whom Swiggy and Zomato want on their platforms end up paying much lower commissions than smaller restaurants.

Rapido's foray into the D2C delivery space comes at a time when Zomato and Swiggy have a comfortable duopoly in the market. Restaurants, however, are raising concerns over commission models and margins, which is what Rapido's strategy seems to be focusing on.

Rapido is expected to launch the delivery fees model as part of its pilot project in Bengaluru from July.

To add context, Rapido's business-to-business logistics arm already offers food delivery services to Swiggy and the Open Network for Digital Commerce.

In 2023, Rapido had raised $180 million in a Series D round of funding led by Swiggy. "Swiggy's participation in this round will build on the synergies between the two companies," it had said. However, this investment lacked an exclusivity clause that could have restricted Rapido's D2C food delivery push, according to people in the know.