Rapido accidentally created a premium tier within two-wheelers by finally splitting bikes and scooters! It is one change that also fixes both driver earnings AND consumer choice. Here's how:
Rapido is piloting a scooter option in Bangalore. At first glance, it confused me a little. But if you look under the hood at the driver economics, it's actually a correction of a long-standing market imbalance that was hiding in plain sight.
Because the math for bike and scooter drivers is totally different, the core reason being mileage and to an extent the upfront buying cost. A commuter bike goes 30% farther for the same quantity of petrol.
Under the old 'one-price-fits-all' model, where a rider paid a flat fare and the system randomly assigned a bike (Splendor/Platina) or a Scooter (Activa/Dio), the drivers were essentially playing a lottery. It's a no-win scenario for pricing. Either the bike person is getting overcompensated relative to their vehicle's operating cost, or the scooter person is getting undercompensated.
Scooters effectively subsidized bike rides.
The new scooter pricing achieves earnings parity. It ensures that regardless of the vehicle type, the driver's net earnings per kilometer remain relatively balanced.
To demonstrate: for an 11km, 22 min ride around midnight, bike was priced at ₹127 and scooter ₹151. This premium of 15-20% was consistent across various distances, which just about covers the fuel economics gap. The scooter rider is paying accurately for the first time.
Somehow by design, the lower mileage scooters also happen to be more comfortable (easier to sit, better for sarees/formal wear) - so what's actually a cost-recovery mechanism for drivers gets positioned as a comfort upgrade for riders, making it a premium within the bike service.
This is a particularly valuable option for certain user segments, such as women who may prefer scooters to bikes. It introduces more choice for the riders, and the new pricing becomes a utility premium.
Lastly, an increase in the flat fare would have come at the cost of affordability. Splitting the categories keeps the entry price low while creating a premium tier.