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Bike taxi service Rapido is now trying its luck into food delivery and may challenge existing food delivery apps like Swiggy and Zomato. Taking the leverage of a fleet of 4 million riders and better logistics Rapido lowered commission rates as compared to these major players. Elara Securities claimed that this move can impact the earnings of Zomato and Swiggy. As they already have an existing fleet of 4 million riders they can use it for food delivery and reduce its operational costs. If executed efficiently it can be a serious threat to Swiggy and Zomato. Zomato and Swiggy have been operating in the food delivery space for over a decade and their earnings have now stabilized. Their current target is to achieve 5% adjusted EBITDA soon. However Rapidos entry can disrupt their stable operations. Elara Securities predicts that if Zomato’s earnings drop by 200 basis points and the valuation of the food delivery segment decreases by 10% its target price can fall by 6% to Rs 282 from the current Rs 300. Rapido has also determined its commission rates for food delivery apps which are lower than Zomato and Swiggy. Rapido will charge restaurants a commission of 8–15% depending on the order value whereas Swiggy and Zomato charge 21–22% which is very high as compared to Rapido. Reports suggest that Rapido may charge Rs 25 for orders below Rs 400 and Rs 50 for orders above Rs 400. The service will initially be launch in Bengaluru. ONDC and Ola earlier faced last-mile connectivity issues Rapido will benefit from its fleet of 4 million riders who handle 3–3.5 million rides daily. In comparison Zomato has 4.4 lakh riders and Swiggy has 5.3 lakh riders. Rapido Cost Efficiency Model Elara pointed out that Rapido can utilize idle rider time for food delivery which will reduce additional expenses and increase rider’s earnings. Moreover Rapido’s experience with food delivery for ONDC and its ability to cross-sell to ride users will help it acquire customers at a lower cost. However Rapido doesnt have a dedicated fleet for food delivery which can create challenges in meeting the demand for deliveries within 30 minutes.