Rapido Challenges Zomato, Swiggy with Low 8-15% Food Delivery Commissions

The competitive Indian online food delivery market is about to get a new player. Ride-hailing platform Rapido is making a bold move with its food delivery launch, aiming to significantly undercut established giants like Zomato and Swiggy. As reported by Business Standard, this strategic entry promises a more favorable environment for restaurants, a key differentiator in a sector often criticized for high commission rates. The pilot program for this new service, named ‘Ownly,’ is expected to begin in Bengaluru by late June or early July.

Rapido’s Low Commission Model Set to Disrupt

At the heart of Rapido’s strategy is its low commission model. Unlike the typical 16-30% commissions charged by Zomato and Swiggy, Rapido plans to operate with significantly lower rates. During the pilot phase, restaurants will face a fixed delivery fee, which translates to an effective commission rate of 8-15% by Rapido.

Rapido has simplified its delivery charges. Customers will now pay ₹25 for orders under ₹400, and ₹50 for orders above ₹400 placed through the app. This is a stark contrast to the current market leaders and could provide much-needed relief to restaurants struggling with thin margins. The company aims to shift to a zero-commission model with a flat subscription fee once the service gains scale.

Introducing Rapido’s New Food Delivery Service

Rapido’s new food delivery service, ‘Ownly,’ is designed to offer a transparent and economically viable platform. Customers will be able to browse and order directly from restaurants through the Rapido app. This initiative comes at a time when many small and independent restaurants have voiced concerns over the high charges imposed by dominant food delivery platforms.

This model aims to bring predictability to costs for restaurants, allowing them to better manage their finances. Additionally, Rapido intends to prevent restaurants from adding separate packaging charges, ensuring that customers only pay the listed price plus GST without hidden mark-ups.

Impact on the Food Delivery Landscape

Rapido plans to leverage its vast network of two-wheeler riders, reportedly over 2 million, to fulfill food deliveries, optimizing its existing logistics infrastructure. This could be a significant advantage in terms of operational costs. The entry of Rapido with its aggressive pricing strategy is expected to intensify competition in the Indian food delivery market.

This would compel existing players to re-evaluate their commission structures and potentially lead to a more restaurant-friendly environment across the industry. For consumers, this could eventually translate into better pricing and more choices as restaurants find it more profitable to partner with delivery platforms. The pilot in Bengaluru will be a crucial test for Rapido’s disruptive approach.