Lal Bahadur Shastri Institute of Management
Strategic Management – II
Assignment – 2 Submission 1
Submitted to:- Submitted By:-
Dr Ajay Jain Namish Guglani (2024/006)
Professor Of Practice
LBSIM
1. Introduction
Rapido, a bike-taxi aggregator model in India, has become one of the
disruptors in the national urban mobility and the last-mile connectivity
ecosystem. The company was launched in 2015 and is based in Bengaluru
and is aimed at addressing an inconspicuous yet common issue short
distance transport in congested cities in India is inefficient, unreliable, and
extremely costly. A combination of asset-light business structure, where
Rapido has individual captains (bike owners) and a tech-powered ride
allocation platform has enabled Rapido to provide affordable, fast,
convenient means to travel.
In the past years, Rapido has now grown to over 100 cities in India with a
specific focus on tier-2 and tier-3 markets where competition on large-
scale ride-hailing has been less stiff. Another aspect of the company is
that it has diversified into some similar services like auto-rickshaw
booking, parcel delivery and many more partnerships with e-commerce
and quick-commerce platforms as well like Swiggy, Zepto or JioMart, to
ensure that captains can make money as well in the other categories of
services it provides.
The present paper critically evaluates the extent to which the strategic
plans of Rapido have been close to what has materialized in practice,
indicates gaps between planning and practice, accounted evaluation
mechanisms to measure performance, and major challenges that keep the
two together and in stride with a highly competitive and regulatory-
sensitive environment.
2. Alignment between Aimed and Achieved Strategy
2.1 Strategy Intended
The strategic intent of Rapido can be summed up as both corporate,
business and in the functional level strategies that guided the business in
the following way:
Corporate Level Growth Strategy (Corporate Level)
Horizontal expansion to the urban India with particular attention to
the tier-2 and tier-3 cities with the soaring demand on low-cost
transportation due to the limited supply and the decreased level of
competition with the established ride-hailing commons in the
airport.
Exploit other revenue earning avenues other than passengers bike-
taxi services like last-mile delivery and the introduction of electric
vehicles (EVs) into the services which will collate with the laws of
environmental conservation and reduce operational expenses.
Business Level- Cost Leadership (Business Level)
Price the cheapest local rides available over the traditional auto-
rickshaws, cabs or even the public two-wheel-ride rental.
Operational costs must be kept low by using a gig-economy
business model where independent captains are used rather than
owning vehicles and hiring full-time drivers.
Hyperlocal functional focus (Operational Level)
Apply local advertising, local promotions, and culturally resonant
brand communications to relate to local people.
Increase trust by building trust with stable service standards, low
queues, oh and powerful onboarding procedures with captains.
Technology-Driven Efficiency
Allocate rides, dynamic pricing, route optimization, payment and customer
feedback management based on the Rapido app.
2.2 Achieved Strategy
When looking at the market activities of Rapido, it can be seen that it has
been very effective in a couple of aspects:
Market Expansion realised
Rapido is currently running in 100+ cities with a leading market share of
65 percent in the bike-taxi business particularly in non-metro regions
where conventional transport services are affordable or untrustworthy.
Practice of Diversification
The connections to Swiggy, Zepto, and JioMart also enable the company to
allocate delivery orders to its captains when they are not picking up
passengers and have more hours to work, increasing asset utilization and
revenue.
The implementation of Hyperlocal Marketing
Advertising campaigns in the local language, promotion of festivals in the
local region and multi-lingual customer care has also been introduced so
as to consolidate brand position.
Efficiency in Operation Sustained
Features of the app include real-time ride allocation, GPS tracking, easy
online payments, and post-ride rating which enhance the customer and
business activity.
2.3 Points of Agreement
Geographic Targeting: Phenomenal reach in the tier-2 and tier-3
cities indicates effective implementation of the planned focus
growth.
Cost Leadership: Low costs: Low competitions fares will continue to
form a fundamental basis in acquiring customer.
Utilization of Technology: Fully integrated ride-matching algorithms,
optimization of a route with the help of GPS and dynamic pricing
work perfectly.
Diversification of Revenue: The Reliance on partnership delivery
handsomely complements ride-hailing revenue.
2.4 Action Deviations
In spite of the achievements, there are avariances:
Regulatory Jeopardies: Services in major markets have stalled due to
state-level prohibition in Delhi, Maharashtra and Karnataka further
jeopardizing the vision of continuous growth.
Safety Perception Gap: Although Rapido implemented an ethnography-
based system to make people feel safe and confident in using their
services, especially female clients, safety concerns curb the overall
market adoption.
3. Formulation amplifications absenteeism
3.1 Preparedness Gap Regulatory
Proposed: National standardized growth.
Reality: Major market suspensions are a sudden result of bans and
limitations on licenses.
Cause: The strategic plan did not correctly assume the fluctuation of
the state-level regulatory environment and the absence of uniform
national regulations in relation to the bike-taxis.
3.2 Labor Retention Gap
Projected: A big, committed captain base with long-lasting payouts.
Fact: Low per-km rates (7-8 after commission payment), competition
by Ola and Uber and captains operating on two fronts.
3.3 Gap in profitability
Designed: Low prices and sustainable profits.
Fact: Narrow margins limit wage increases or rampant expansion.
Raising fares would be risky because of high price sensitivities of
target markets.
3.4Customer Trust Gap
Intended: Religious trust manufacturing and a high degree of safety
as a sales factor.
Reality: Social media narrations of negative experience sometimes
create perceptions on the safety of the brand.
4. Evaluation Mechanisms
4.1 Value added (Key Performance Indicator/KPI)
Market Penetration: An effective market share, segment market
share, and use cities and ride volume.
Captain Metrics: Number of active captains, the rate on boarding,
and retention rate.
Operational Metrics: The average wait time, loading time, app
uptime.
Customer Satisfaction: Ratings, the time to address complaints, net
promoter score (NPS).
Revenue Performance: Revenue per captain, per city and per
delivery partnership.
4.2 Dashboards
Real-Time Operations Dashboard: Monitors active rides, availability,
and hot spots of that demand with captains.
Financial Dashboards: Keeps track of revenue, ride volumes and
incentives on the city basis.
Customer FeedBack Dashboard: it gathers ratings, and complaints
data to be responded quickly.
4.3 Periodic Reviews
Monthly City Reviews: Determine balance of supply-demand, marketing
and competition. Quarterly Strategic Reviews: Review the growth metrics,
regulatory risk, and ROI of partnership.
4.4 Individual Metrics Partner-Specific
The idle hours involve the delivery orders processed.
INCOME contribution of cross-platform to income of captains.
5. Issues of Maintaining Alignment
5.1 Volatility of regulation
Legal uncertainties and state-based prohibitions cause those that operate
in that line of business to adapt constantly and make planning on a long-
term basis hard to do.
5.2 Gig Force of Labor
A non salaried and independent workforce is flexible and unstable. Low
compensation and unavailability of benefits are risky.
5.3 Pressure/ Competition
Ola and Uber use cutthroat campaigns to undercut the price advantage
and vendor loyalty of Rapido.
5.4 Brand Safety Issue
Even a minor safety incidence can produce a high degree of reputational
harm even in the era of a social media viral environment.
5.5 Constraints of Scalability
Though the app infrastructure can be scaled quickly, some physical
factors such as onboarding centers and city-based teams have to be
maintained with investments on a sustained basis.
6. Strategies to be Recommended to Strengthen Strategy
Alignment
6.1 Regulatory interaction
Establish specific teams of public affairs in the states with high
revenues.
Be proactive in working with policymakers to develop consistent
regulatory regime.
6.2 Motivation of the workforce
Implement step merits of captaining loyalties with volume of rides.
Offer discount to fuel or maintenance services of vehicles as direct
methods to increase profits.
6.3 Multipurpose Source of Revenue
Renting pilot EVs will save on the cost of captains and be
sustainable in line with global ambitions.
Expand B2B delivery business as a way of leveling revenue
imbalance during off-peak passenger time.
6.4 Safety & Trust-Building
Improve safety measures such as the SOS buttons and friends/family
tracking a ride, and women captains certification. Conduct pre-safety and
respectful rides campaigns and support them with captain training
modules.
7. Conclusion
The strong level of adherence to its planned strategy is currently
evidenced in Rapido as far as geographic expansion, cost leadership, and
deployment of technology sections are concerned. Leadership and the
ability to match competency is still however causing the gap in execution
through regulatory uncertainty, difficulty in retaining captains as well as
perception of safety.
Filling such gaps will entail effective actions on policy, findings incentive of
workforce, and sustained safety innovations. In this way, Rapido will be
able to enhance its strategies, preserve market leadership in the bike-taxi
sector, and develop a more sustainable business model to initiate
implementing changes in the Indian rapidly evolving mobility market.
