Rapido’s shortcut to bike-taxi supremacy in #india

There may be a mad rush to offer all sorts of bike-taxis in Asia—13 companies have applied for licences in Singapore—but no one’s disputing that this business is truly local. And in India, there’s a new company zipping around cities, turning the word ‘local’ on its head.

 

Even though Indian cities rank high on the world’s worst traffic flow list, few states have a clear regulatory framework for bike-taxis. Some like Haryana or Telangana have allowed it, but are handing out yellow number plates in a way that’s throttling businesses.

 

No company has negotiated this regulatory no man’s land better than Rapido, which has emerged as India's largest bike-taxi company. It does close to 90,000 rides a day across 31 Indian cities. Many smaller companies have downed shutters; even heavy-weights like Ola and Uber have struggled. But Rapido has revved up its business with a single tactic—creative interpretation of a number of existing transport laws. Including in Karnataka, which does not allow bike-taxis at all.

 

Competitors and legal experts that The Ken spoke to are convinced that Rapido is circumventing due process by adding private bike owners to their fleet. “If I get caught by the police for flouting the norms, Rapido doesn’t pay the challan, I do,” says a driver in Gurugram, where Rapido does nearly 9,000 trips per day.

 

What happens in Karnataka? 

 

“If I was caught by the police, I would just lie about the pillion rider,” says a driver in Bengaluru, where Rapido does 20K trips in a day .

 

How has Rapido gotten away when competitors are simply wringing their hands? Why has the regulatory creep in Ola’s case turned into regulatory laxity for Rapido? What gives investors confidence as Rapido closes a $50-million-plus round?