According to The Economic Times, Rapido will charge restaurants a fixed delivery fee of ₹25 on orders below ₹400 and ₹50 on orders above ₹400. This translates to a commission range of 8–15%, significantly lower than the 16–30% charged by incumbents Zomato and Swiggy.
Rapido is betting that its existing logistics infrastructure and hyperlocal delivery network can help it take on the entrenched Zomato-Swiggy duopoly.
But history hasn’t been kind to challengers.
Is Rapido walking into a storm? Let’s dive in.
Restaurants crave a new recipe
Now valued at over a billion dollars, Rapido is stepping up its food delivery ambitions.
According to ET, the National Restaurant Association of India (NRAI), which represents over 500,000 restaurants across the country, has been in discussions with Rapido to explore a new, more sustainable model for the sector.
Also Read: Nexus Venture to invest Rs 125 crore in Rapido ahead of food delivery launch
“We’ve been in discussion with Rapido over the last few months just the way we are working closely with ONDC,” said NRAI president Sagar Daryani. “We are discussing a structure which is economically and democratically much more viable for restaurants to sustain.”
While he declined to offer specifics, the subtext is clear: restaurants are looking for an escape hatch from Zomato and Swiggy.
And it’s not hard to see why. Many small restaurant owners have grown increasingly vocal about the financial strain of working with the dominant platforms, high commissions, costly ad spends just to remain visible, and murky contract terms have led to growing frustration.
“Zomato is becoming unsustainable for small restaurant owners like us,” Vandit Malik, founder of The Garlic Bread, wrote on LinkedIn. “To even be visible on the platform, I’m forced to spend ₹30+ per order on ads. What’s left? Pennies. Sometimes, not even that.”
Another restaurant in the National Capital Region, Saffroma, briefly went viral after announcing on LinkedIn its exit from Zomato, citing issues such as zero payouts and unauthorised ad spends. The post was later deleted, but the sentiment continues to echo across the industry.
This moment of churn might seem like an opportunity for Rapido to carve out a meaningful foothold in a market hungry for change.
But history offers a warning.
The graveyard of food delivery dreams
Over the past decade, multiple food delivery ventures, including some with unmatched brand power and deep pockets, have entered the market with fanfare, only to exit in disappointment.
Uber Eats, which entered India in 2017 with the backing of one of the world’s most recognisable brands, failed to make a dent. Despite leveraging its ride-hailing network and offering aggressive discounts, it never captured more than 12% of the market, as per a CNBC-TV18 report. By 2020, it exited entirely, selling its India operations to Zomato for a reported $350 million.
Amazon, too, dabbled in food delivery during the pandemic in 2020, starting with Bengaluru. Despite its logistics strength and massive user base, Amazon Food remained an under-marketed side project and shut down by the end of 2022.
Foodpanda’s story is even more instructive. One of the early entrants, it was acquired by Ola, which promised a $200 million investment to revitalise the platform. But operational lapses, poor delivery performance, and partner disputes led to a rapid decline. Despite a pivot to cloud kitchens, it disappeared by 2019.
Ola tried again with Ola Café, an in-app food ordering option, but that, too, folded within a year.
Also Read: Can JioMart, Rapido change the game for Eternal, Swiggy? Deven Choksey answers
Then came the niche players: Holachef with chef-prepared meals, MonkeyBox with healthy lunches for kids, ZuperMeal with backing from celebrity chef Sanjeev Kapoor. Some didn’t last a year. Others raised money, expanded to a few cities, then quietly shut down.
What united them all was a failure to grapple with a core truth: India’s food delivery sector is not just competitive, it’s punishing.
India’s food delivery battlefield is brutal
The economics are harsh. Operating in a country with patchy infrastructure and wide income disparities drives up logistics costs, yet the average order value (AOV) remains modest, typically between ₹200 and ₹500, according to Statista. In 2024, Zomato’s AOV stood at ₹613, while Swiggy’s was ₹499 in Q2 FY25.
Still, the market potential is massive. Statista projects revenue in India’s online food delivery sector to hit $54.97 billion in 2025, growing at a compound annual growth rate (CAGR) of 13.26% to reach $102.43 billion by 2030. In the meal delivery segment alone, user numbers are expected to reach 363.4 million by 2030, with penetration hitting 20.2% by 2025.
But here’s the catch.
Deep discounts, shallow margins
To grow fast, startups have historically relied on steep discounts to attract users, a strategy that quickly drained their cash reserves. Once the offers dried up, so did user interest.
A 2018 LiveMint article observed that firms ramped up marketing and discounts to drive user acquisition. Swiggy tied up with the Indian Premier League for match-day discounts, while Zomato rolled out city-specific promotions. These were seen as necessary to build liquidity across users, restaurants, and delivery partners.
From 2015 to 2020, such discounting strategies were widespread. A 2021 Medium article highlighted that 50% off first orders and referral bonuses were common but unsustainable. A 2025 FasterCapital report also noted that while discounts kept users engaged initially, their effectiveness waned over time.
According to a 2024 MarketsandData report, app-based platforms are now more reliant on loyalty programs and real-time tracking to retain users. Repeat customers, drawn by convenience and reliability rather than discounts, are now key drivers of volume.
Still, the cost of acquiring a customer remains high. A 2022 IMAP India report pegged customer acquisition costs (CAC) for Indian startups between ₹1,200 and ₹1,500. A 2025 Opensend estimate placed e-commerce CAC at $53 (around ₹4,400), although food delivery in India is likely lower, possibly under ₹1,000, due to comparatively lower digital advertising costs.
Also Read: Nischal Maheshwari sees no long-term impact on Zomato, Swiggy from Zepto’s regulatory issues
Then come the fixed and variable costs. From app development and fleet maintenance to packaging and payment gateway charges, the expenses pile up. A 2024 Grand View Research report noted that high delivery costs, fuel, driver wages, add pressure to already thin margins.
Logistically, India is no cakewalk. Deliveries must navigate traffic, narrow lanes, extreme weather, all while ensuring food remains hot and customers remain happy. Retaining delivery personnel is another headache; many quit within weeks due to low wages and high pressure.
A 2021 McKinsey report highlighted that restaurants using delivery platforms typically incur commission fees ranging from 15% to 30%. “When combined with high delivery costs, this makes profitability elusive, not just for restaurants, but for the platforms themselves.”
In India, players like Swiggy and Zomato have tried to tackle supply-side costs by investing in cloud kitchens. However, for new entrants, these setups are capital-intensive and require years to scale sustainably.
Technology isn’t always a saviour either. Buggy apps, unreliable tracking, and slow customer service have driven away users. In a segment where trust and reliability are paramount, one poor experience can end a relationship.
Even well-funded players floundered when they lacked focus or differentiation. Amazon Food never clarified why it existed. Foodpanda lost trust. TinyOwl collapsed under operational chaos. Most challengers were Zomato-Swiggy clones, with neither the reach nor recall to compete.
The Zomato-Swiggy duopoly
Meanwhile, the duopoly has only grown stronger. In Q1 FY25, Zomato held 58% of the food delivery market; Swiggy accounted for the remaining 42%, as per Motilal Oswal.
Zomato’s 2021 IPO gave it a war chest to diversify into services like Blinkit. Both firms benefit from years of data, on user preferences, hyperlocal logistics, and delivery efficiencies, that new entrants can’t easily replicate.
Still, the market resists total monopolisation. Restaurants continue to protest. Consumers grumble. And government-backed efforts like ONDC aim to increase transparency and competition. There is space, albeit narrow, for challengers that offer something truly different.
Rapido’s toughest delivery yet
This is the tightrope Rapido now walks. With a footprint in 100+ cities and plans to scale to 500 by next year, it certainly has ambition. Its existing two-wheeler logistics fleet could offer a cost edge for short-distance, hyperlocal deliveries.
But turning this into a viable food delivery business is a different game.
If Rapido merely tries to replicate what Zomato and Swiggy are doing, without rethinking the economics, customer experience, or restaurant partnerships, it’s likely to meet the same fate as its predecessors.
To stand a chance, Rapido must build something distinct, durable, and deeply aligned with the needs of both restaurants and consumers. That means investing in technology, not just scooters. It means forging real partnerships, not squeezing margins.
