Rapido, a ride-hailing platform backed by Swiggy, has announced that it is extending its software-as-a-service (SaaS)-based zero commission model to its auto drivers. The company claims that this is the first time in India that such a model has been introduced for auto drivers, who usually have to pay around 15% commission per ride to the aggregators.
What is the zero commission model?
The zero commission model is a SaaS-based model that operates on a nominal daily access fee, rather than a commission per ride. This enables auto drivers to keep the entire earning to themselves, break free from commission constraints and maximise their lifetime earnings, the company said in a statement.
How does this model benefit auto drivers?
The company said that the zero commission model will help auto drivers to increase their income and reduce their dependency on the aggregators. The company said that it will also provide training, support and incentives to the auto drivers to ensure quality service and customer satisfaction.
The company said that it is making a shift from aggregator-commission-led model to introduce a lifetime zero commission model for its auto drivers to make the service transparent and inclusive.
Why is Rapido targeting auto drivers?
Rapido Co-Founder Pavan Guntupalli said that the company sees its competition not in parallel players, but in the offline market. He said that there are about 2 crore auto rides daily in India, of which the online market covers less than 10%.
“There are close to 25 lakh auto drivers in India, of which about four lakh offer services through Rapido. Through the zero-commission initiative, we aim to onboard a substantial number of offline drivers on Rapido,” he said.
He added that the revenue margins will be constrained, “however, we are not looking at per-ride commissions but revenue from an aggregate market hold in the long-term”.
“Currently, Rapido is doing about 17 lakh rides per day across all verticals. We plan to double the figure to 30 lakh by the end of the year,” he said.
How will this benefit the customers?
The company said that under this model, Rapido plays no role in deciding the price point, making the service transparent and inclusive for all stakeholders. The customers will be able to see the fare before booking the ride and pay directly to the driver.
The company also said that it will ensure safety and hygiene measures for both drivers and customers by providing masks, sanitisers and helmets. The customers will also have an option to rate their ride experience and share feedback.
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