Rapido enters food delivery business to challenge Swiggy and Zomato

Ride-hailing company Rapido has entered the food delivery market with the launch of a new zero-commission platform called Ownly in a move that seeks to disrupt the duopoly of Swiggy and Zomato in the country’s fast-growing online ordering space.

The Bengaluru-based start-up, which reportedly facilitates four million rides daily across 500 cities and serves 30 million monthly active users, is positioning Ownly as a transparent, cost-efficient alternative to dominant players that typically charge restaurants between 15 per cent and 25 per cent commission on every order.

Citing a communication shared with restaurant partners, Hindu Businessline reported that the company said, “We are a zero commission platform that believes in honest pricing - offline price equals online price.”  

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Unlike its rivals, Rapido’s new venture will not impose commission fees, nor will it charge packaging or platform fees to customers, apart from statutory taxes.

Cross-subsidised delivery model targets affordability

Ownly’s pricing model shifts the financial burden of delivery away from restaurants. For orders under Rs 400, restaurants will pay a Rs 25 delivery fee, and for higher-value orders, Rs 50. However, sources familiar with the company’s pricing plan say Rapido is cross-subsidising delivery costs to keep the service affordable for customers.

In practice, restaurants pay as little as Rs 10 on orders under Rs 100, while customers are charged Rs 20. For orders above Rs 100, restaurants pay a flat Rs 25 fee plus applicable GST, with Rapido absorbing the remaining costs.

The company plans to introduce a fixed subscription model for restaurants once it achieves scale, while maintaining its commitment to zero commissions.

“Structurally, we hope to bring delivery costs down across the industry,” Rapido said in a note to partners. The platform has asked restaurants to list at least four meals priced under Rs 150 in an effort to keep the platform accessible to price-sensitive users.

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Restaurant visibility and competitive edge

In a further departure from industry norms, Rapido is promising “earned visibility” based on customer ratings, not paid promotions or discounts. This model, the company argues, will better reward quality and customer satisfaction, rather than advertising budgets.

Some Industry observers believe the new venture has the potential to reshape India’s online food delivery ecosystem. “This could bring about a disruption in the market which is currently dominated by Swiggy and Zomato,” said an industry stakeholder familiar with Rapido’s plans, quoted by The Hindu.

Still, scepticism remains. In a recent research note, analysts at Bernstein pointed out that previous attempts by Amazon, Ola, and government-backed ONDC to break into the segment failed to gain meaningful traction. These efforts struggled with inconsistent customer experience, limited restaurant availability, and challenges related to India’s fragmented supply chains.

HSBC analysts echoed similar concerns in a separate report, noting that while there are cost parallels between two-wheeler ride-sharing and food delivery, maintaining user experience and scaling up operations will remain major obstacles, according to a report by Moneycontrol.

Funding and strategic goals

The launch of Ownly coincides with Rapido’s latest funding round, which is expected to raise Rs 125 crore (approximately $15 million) from Nexus Ventures as part of its Series E. The additional capital could help subsidise early delivery costs and fund customer acquisition in a highly competitive market.

The zero-commission model may resonate with smaller restaurant operators and cloud kitchens who have long protested the high fees levied by Swiggy and Zomato.

However, Rapido’s success in the space will hinge on its ability to attract a large user base, offer consistent delivery service, and maintain financial sustainability without the commission revenue stream that underpins its rivals.