Bengaluru, June 2025 – Ride-hailing start-up Rapido has created a stir in the Indian food delivery space with its new initiative, “Ownly”, a pilot program launched in Bengaluru that aims to challenge the long-standing duopoly of Zomato and Swiggy. With a value-driven model targeting price-sensitive consumers, Rapido promises zero commission for restaurant partners, meals priced under ₹150, and no extra packaging or platform fees.
While this bold move has generated excitement, market analysts and brokerage firms remain skeptical about Rapido’s ability to meaningfully disrupt the food delivery sector, citing deep-rooted operational and economic challenges.
Operational Complexity Favors the Incumbents
Leading brokerage firm Bernstein has drawn comparisons to failed or underwhelming entries into the food delivery space by giants such as Amazon, Ola, and ONDC. According to Bernstein, most new entrants struggle due to lack of selection, inconsistent customer experience, and operational complexity.
“Food delivery is a logistically intensive business. New entrants face enormous challenges negotiating with over 200,000–300,000 restaurants in a fragmented market,” Bernstein noted.
India’s food delivery market is highly fragmented, with only 10% of Gross Order Value (GOV) coming from organized QSRs, and the remaining from smaller, less profitable restaurants. At such low contribution margins, the delivery flywheel model becomes unviable, making scale difficult to achieve without significant capital burn.
Analyst Views: Low Market Impact, Profitability Hurdles
HSBC echoed Bernstein’s concerns, suggesting that Rapido is unlikely to dent the market share of dominant players. As of FY25:
- Zomato holds 54% of the market
- Swiggy commands 46%
Both platforms are firmly entrenched with loyal customer bases and strong logistics networks. In fact, Swiggy’s food delivery GMV grew 18% YoY in Q4FY25, outpacing Zomato’s 16% YoY.
HSBC added that while the unit economics of food delivery and two-wheeler ride-sharing are similar, food delivery demands superior customer service, consistent fulfillment, and higher scale, which are challenging for new players.
“New entrants may only attract the less profitable tail-end of the market, limiting their ability to scale or generate meaningful revenue,” HSBC warned.
The Economics Behind Rapido’s Model
Rapido’s “Ownly” seeks to appeal to Tier 2 and Tier 3 markets, serving meals priced below ₹150 and maintaining delivery costs around ₹50–60 per order. The platform aims to bring in lower Average Order Value (AOV) restaurants that have not been feasible for Zomato and Swiggy due to low margins.
However, Bernstein cautioned that maintaining a low take rate in a capital-intensive business will limit Rapido’s sustainability.
“Rapido will eventually need to raise commission rates to stay afloat. The current model is not viable long-term,” Bernstein stated.
Moreover, Rapido remains unprofitable, despite raising $600 million from investors. Ironically, Swiggy holds a 12–13% stake in Rapido, raising questions about internal market dynamics.
Zomato and Swiggy: The Supply-Side Advantage
On the supply side, Zomato leads with approximately 314,000 active restaurant partners compared to Swiggy’s 252,000, as of Q4 FY25. This gives Zomato a considerable advantage in scale, selection, and reach.
“New players like Rapido will face major hurdles in onboarding restaurants already tied up with dominant platforms. Many outlets remain outside Zomato and Swiggy’s reach due to poor economics—not lack of opportunity,” Bernstein added.
Why Ride-Hailing Players Eye Food Delivery
From a cost structure perspective, food delivery is more attractive than ride-hailing. While the AOV for a bike ride is around ₹70 with a margin of ₹3–4, food delivery can earn platforms ₹100+ per order in revenue, even with comparable delivery costs.
But industry veterans warn that the real challenge lies beyond margins. It’s about delivering consistent customer satisfaction, operational efficiency, and brand trust—factors that take years to build and significant resources to scale.
