After Hyderabad, Rapido expands cab services to Bengaluru; applies for licence

Karnataka transport department officials said that cab operators should obtain licences under the Karnataka On-Demand Transportation Technology Aggregator Rules, 2016.

L Hemanth Kumar, additional commissioner for transport and secretary of the State Transport Authority, told Moneycontrol that Rapido had applied for a licence under these aggregator rules last week.

“We need to inspect their 100 vehicles before issuing a licence,” he said. He said licences of other cab aggregators like Ola and Uber expired in 2021, and both aggregators have applied for renewal. “We will consider their applications for licence renewal soon,” he added.

Following the launch of cab services in Hyderabad, Rapido in a statement said: “At Rapido, we’re thrilled to share that our test run in Hyderabad for Rapido Cabs is off to a fantastic start. The city’s vibrant market has warmly embraced us, and the positive response is truly heartening. As we navigate our path forward, we are committed to keeping you closely informed about our progress and eagerly anticipate bringing our innovative services to other cities.

Karnataka transport department records reveal that 16 firms have obtained licences from the department since 2016, but the licences of five, including Ola and Uber, have expired. Some of the other firms have become non-operational following the Covid-19 pandemic.

K Somashekar, the leader of the Karnataka Rajya Chalakara Parishath, a union of taxi and autorickshaw drivers, said, "Rapido is currently offering lifetime zero commission for drivers. Passengers may not be finding cabs available because only a few drivers have joined them, while others are in a wait-and-watch mode. The aggregator rules apply to cabs, but firms like Rapido have been operating autorickshaws and bike taxis without permission. We have no opposition if they operate cabs after obtaining a licence."

Rapido has been operating petrol-run bike taxis in Bengaluru since 2015 despite not having a licence to do so. The government is keen that only electric two-wheelers offer the service, but this is yet to take off.

Also, read: Why Karnataka's electric bike taxi policy failed to take off

In 2021, the company launched autorickshaw services in Bengaluru. Last month, Rapido also introduced its 'Auto Plus' service in Bengaluru, a premium offering promising no cancellations. The aggregator has stated that its charges will be 25-35 percent higher than regular fares, but the Karnataka transport department has stated this as illegal.

Rapido’s entry to cab services could be a reaction to what it sees as rivals trying to muscle in on its territory. In September 2023, Ola Cabs announced the resumption of its bike taxi services in Bengaluru, using Ola Electric's S1 scooters. Ola is also offering riders the opportunity to earn up to Rs 70,000 per month as part of their push to expand the e-bike taxi service.

Also, read: Ola dangles Rs 70K monthly earnings for riders in push to expand e-bike taxi service

Since its establishment in 2015, Rapido has raised around $320 million in total funding from investors including WestBridge Capital, Nexus Venture Partners, TVS Motor Company, Yamaha Motors, Shell Ventures (the investment arm of the petroleum major), and several others. In April 2022, food tech major Swiggy led Rapido's $180-million funding round, valuing the bike taxi startup at about $830 million, according to Tracxn, a private markets data provider.