Mobility platform Rapido to launch food delivery pilot

Rapido, a ride-hailing platform from Bengaluru, plans to pilot a food delivery service in the city, working with chains like McDonald’s, KFC, and Pizza Hut.

The pilot will cover short-distance deliveries within a 5-kilometer radius from larger restaurant outlets.

This development follows reports of Rapido exploring partnerships with restaurant operators to expand its offerings.

Sources indicate that Rapido aims to cater to consumers with average order values (AOV) under 250 rupees (US$2.94).

🔗 Source: Inc42

🧠 Food for thought

1️⃣ Ride-hailing diversification into food delivery follows a proven growth pattern

Rapido’s entry into food delivery follows the same playbook that transformed Uber from a ride-hailing service into a multi-billion dollar food delivery operator.

When Uber Eats launched, it delivered approximately $6 billion worth of food in 2018, which jumped to a projected $10 billion in 2019, representing one of the fastest-growing segments of Uber’s business1.

This diversification strategy isn’t coincidental. Ride-hailing companies naturally possess the three critical components for food delivery success: an existing driver network, routing technology, and a large customer base familiar with their app interface.

The strategy has proven particularly effective in creating additional revenue streams when core ride-hailing growth plateaus, with Uber Eats quickly becoming profitable in 27 of its 120 markets despite the challenging economics of food delivery2.

For Rapido, this move represents a logical extension of their core business that leverages existing assets while addressing changing consumer preferences toward convenience.

2️⃣ Strategic targeting of lower-priced segment addresses gap in India’s food delivery market

Rapido’s focus on delivering from larger restaurant chains with average order values (AOVs) around INR 250 reveals a deliberate strategy to target an underserved market segment.

The company is specifically positioning below the INR 400-450 AOV dominated by Zomato and Swiggy, suggesting they’ve identified a price-sensitive customer base that existing players haven’t fully captured3.

Operational efficiency will be crucial for Rapido’s success, as delivering lower-priced orders profitably requires exceptional logistics management, a challenge that has caused even established players like Swiggy to post adjusted EBITDA losses in their quick commerce business of approximately ₹5.8 billion in Q3 20244.