Indian ride-hailing unicorn Rapido is testing a feature that enables users to book non-AC cabs at lower fares.

This feature is currently in the beta phase and is available in Bengaluru, according to the Rapido app.

Users can select either “Cab AC” or “Cab Non AC” options when booking a cab.

Rapido has not yet commented on the official launch of this feature.

This initiative may respond to customer complaints regarding drivers on various platforms, including Ola, Uber, and Rapido.

🔗 Source: Inc42

🧠 Food for thought

1️⃣ Economic pressures are reshaping ride-hailing service tiers

Rapido’s non-AC option reflects a broader industry trend of platforms creating differentiated service tiers in response to financial pressures on both drivers and riders.

Ride-hailing drivers across platforms have experienced significant earnings declines, with Uber drivers seeing a 3.4% drop in earnings despite working 0.8% more hours, according to a 2024 Gridwise study 1.

The tiered approach isn’t new to the industry. Uber launched specific AC taxi services in Kolkata back in 2018, creating clear service differentiation with explicit pricing structures 2.

This service segmentation follows a pattern seen across maturing platforms, where initial one-size-fits-all offerings eventually split into distinct tiers to better match diverse customer preferences and price sensitivities.

Rapido’s approach represents a formal acknowledgment of what was happening informally through driver AC refusals, potentially creating a more transparent marketplace where price matches service level.

2️⃣ Driver economics and rider experience create fundamental tension

The “No-AC” campaign by drivers highlights the growing conflict between driver profitability and customer expectations in ride-hailing.

Driver discontent has reached significant levels, with organizations forming to advocate for better working conditions amid concerns about inadequate compensation, as documented in industry analyses 3.