Uber’s India Squeeze: Rapido Surges as the Driver Battle Intensifies

Uber wants to move everything. In India, it is struggling to find enough people to do the moving.

“In India, driver supply growth lagged demand.”

That sentence sits in the prepared remarks accompanying Uber’s November 4 results. For a company that built its business on making a car appear at the touch of a button, it is an uncomfortable admission. The passengers are there. Getting enough drivers to serve them requires more work, and more investment.

Days earlier came another number to spoil the mood. Sensor Tower estimates, reported on October 30, put Rapido at 94 million monthly active app users in India against Uber’s 40 million. The measurement covered September 28 to October 27.

Rapido now has a much larger active app audience. Uber has a supply problem. And the competition for the person accepting the booking comes with a bill that makes the rivalry considerably more interesting than a contest between two logos.

In FY25, reported driver incentives and customer discounts absorbed ₹2,516 crore of Uber India’s ₹2,604 crore in gross ride commissions. Net ride-hailing revenue was left at ₹88 crore.

Uber can afford a long fight. The question is what it gets to keep after paying for one.

The ₹88-crore question

The arithmetic is unforgiving.

Gross commissions were roughly flat in FY25. Incentives and discounts rose 33%. Netted against revenue under the accounting policy described in filings-based reporting, they helped pull net ride-hailing revenue down 89%, from ₹807 crore to ₹88 crore. The ride-hailing segment’s loss widened from ₹330 crore to ₹1,407 crore.

On those rounded figures, incentives and discounts offset nearly ₹97 of every ₹100 in commission income. That measures deductions against Uber’s commissions, rather than the passenger’s fare; ₹88 crore is revenue, not profit.

Uber India Systems’ consolidated figures tell a broader story. Operating revenue rose 2.3% to ₹3,849.2 crore, while its net loss widened from about ₹89 crore to ₹1,512 crore. Most revenue, ₹3,664 crore, came from support services supplied to Uber group companies. The consolidated loss also included ₹358.8 crore in tax expense. Those accounts cover more than domestic ride-hailing.

The telling relationship is between ride commissions and the incentives deducted from them. Uber was earning little more in commissions while giving up considerably more to support participation on its platform.

Size is supposed to make a platform stronger: more passengers attract drivers, and more drivers attract passengers. Uber’s figures show how expensive it can be to keep that virtuous circle turning. The company arranging the journey can end up giving away much of what it earns from arranging it.

These accounts cover the year ended March 2025, before Uber’s subsequent subscription changes. They establish the financial pressure behind its response. The latest earnings admission shows why securing supply remains a live problem.

The parent has supplied fresh money, reportedly investing ₹2,921 crore in the Indian subsidiary across November 2025 and January 2026. Uber is financing its defence. Rapido is making the terms of that defence harder to dictate.

Rapido took the cheaper road in

Rapido began in 2015 with Aravind Sanka, Pavan Guntupalli and Rishikesh SR, taking on the unglamorous business of the short bike-taxi commute. Autos and cabs subsequently carried it further into Uber’s territory.

There is commercial power in becoming someone’s everyday habit. A cheap trip across a congested city gives a passenger a reason to return. An app already used for that trip has an opening when the same person needs an auto or a cab.

The reported audience trajectory shows how far Rapido has travelled. Estimates attributed to Bank of America research put it at about 43 million monthly users in February 2025 and nearly 75 million a year later. Uber moved from about 31 million to 39 million.

The October Sensor Tower report extends the picture: Rapido rose from roughly 74 million in the January–February measurement to 94 million in the latest window. Uber moved from about 39 million to 40 million. These are reported app-usage estimates, not a count of completed rides, but they establish a substantial and widening audience lead.

That is a serious competitive asset. Rapido has more opportunities to put its services in front of active users, and Uber faces a rival that has already persuaded millions to make room for it on their phones.

The next contest happens on the driver’s phone.

The challenger changed the driver’s bill

Rapido helped make subscriptions a competitive weapon. Instead of giving the platform a percentage of every fare, a driver pays for access to bookings. Spread that fee over enough trips and the proposition becomes attractive: more work can leave more of the fare with the person doing it.

K Somashekar of the Karnataka Rajya Chalakara Parishath reportedly described drivers shifting towards Rapido and Namma Yatri after subscription plans improved earnings. His account identifies a reason drivers switched; it is not a national count of departures.

The attraction is easy to understand. A driver has fuel to buy, vehicle costs to cover and hours that earn nothing while waiting for the next booking. The subscription is effectively rent on access to work. Enough bookings can make that rent worthwhile; a long wait makes it another bill. Uber’s brand has to earn its place in that calculation.

Rapido’s own FY25 accounts show a business broader than its zero-commission pitch. Reported subscription revenue reached ₹275 crore, while two-wheeler commissions contributed ₹277 crore and delivery services ₹340 crore. Operating revenue rose 44% to ₹934 crore and the net loss narrowed from ₹371 crore to ₹258 crore. Advertising cost ₹252 crore; delivery charges and captain incentives together accounted for ₹500 crore.

The challenger is also paying to build its position. Its revenue mix makes a straight comparison with Uber India’s consolidated revenue misleading. But it has made the fee charged to drivers a much more visible part of the competition.

Uber followed the subscription shift. Its car-subscription agreement took effect on October 1, 2025, for categories including Go, Go Sedan, Premier and Green, with drivers buying a Drive Pass to access requests.

On October 29 this year, Uber announced passes ranging from six hours to 180 days, onboarding through WhatsApp and credit that lets eligible drivers continue accepting cash trips after their balance runs out.

The six-hour pass is a particularly revealing detail. Uber is competing for a slice of someone’s working day, and trying to make that slice easy to buy. WhatsApp gets the driver in; credit helps keep the driver taking bookings. Behind the grand ambition to move everything lies the less glamorous business of keeping someone online.

Following Rapido comes with a question

Subscriptions can improve the offer to a busy driver. They change the platform’s earning equation, too.

With a percentage commission, a rise in fare revenue can produce more revenue for the platform. With a fixed time-based pass, additional trips within the same window do not automatically produce additional subscription income. The platform must find a fee that drivers will pay often enough to cover the business behind the booking.

Uber still has to attract passengers, maintain the technology, handle support and make the service worth returning to. A cheaper deal for the driver has to leave a viable business for the platform.

Chief executive Dara Khosrowshahi acknowledged the uncertainty in a May interview: “The profitability of the subscription model compared to commissions remains to be seen.”

That sentence deserves to sit beside the latest driver-supply admission. Uber has adapted to a pricing model its challenger helped popularise. The commercial test is whether the adaptation can retain drivers and earn enough from them.

The November earnings call exposed the other side of the calculation. Khosrowshahi explained that Uber was moving some incentive spending from rider discounts towards driver incentives.

“That does mean sometimes higher prices for riders,” he said. He was describing the global allocation of incentives, without giving an India-specific fare change.

That is an awkward trade-off to bring to India. Spend on drivers and there may be more cars to book. Take away the passenger’s discount and there may be another app to check. Rapido’s audience makes the second possibility considerably harder for Uber to ignore.

Rapido does not need to win every Uber customer. It can make keeping those customers more expensive.

A global giant with local supply problems

India’s supply pressure sits within a wider international problem. Brazil remained undersupplied in the latest quarter, while tighter immigration flows constrained driver availability in Canada. Uber said most of its bookings-growth slowdown came from outside the US.

In Brazil, it had already identified competition from delivery platforms for two-wheeler drivers. The same rider can transport a passenger or deliver an order, leaving platforms competing for the same working hours.

On the November call, finance chief Balaji Krishnamurthy identified higher fuel prices as a meaningful pressure on supply in India and Brazil. Uber was investing in recruitment, retention and engagement, and said supply hours improved in October, including in both countries.

Global Mobility bookings grew 17% at constant currency to $29.5 billion. Uber said Mobility growth came in one to two percentage points below its expectations. Its fourth-quarter adjusted earnings forecast of 95–99 cents a share also fell short of the $1.06 analysts expected, Reuters reported.

Yet the global ride business was becoming more profitable. Mobility segment operating income rose 27%, with its margin reaching a record 8% of gross bookings. Across Uber, operating income reached $1.4 billion, up 30%, on $59.8 billion in gross bookings.

That gives Uber substantial resources to deploy in India. It also raises the standard against which the investment will eventually be judged. A profitable global business can keep funding India for years. That buys time to solve the problem. It also gives investors years of spending to ask about.

The US presents a different challenge. Bloomberg reported November 4 that Waymo plans direct app launches in Austin and Atlanta in January 2028, ending Uber’s exclusivity. Waymo currently directs riders in those cities to Uber.

The relationship illustrates a platform’s recurring vulnerability: a supplier can develop its own route to the customer. India’s drivers already have several platforms to choose from. Owning the booking interface does not secure their working hours forever.

Uber has accepted major retreats before, selling its China operations to Didi in 2016 and its Southeast Asian business to Grab in 2018. Its willingness to restructure is part of the history behind this rivalry.

An August report about combining Uber’s and Rapido’s Indian operations briefly raised that prospect closer to home. Rapido denied the reported talks; Uber declined to discuss private conversations or speculation. No deal was announced. The demonstrable story today is the competition they are financing.

Black still needs someone behind the wheel

Uber’s premium push offers one answer to the earnings question. On October 30, an executive outlined plans to take Black into more metros after its Pune launch, using fleet partners, experienced drivers and additional training. Uber did not disclose Black’s ride volumes.

The portfolio logic predates the latest supply squeeze. On its November 2025 earnings call, management described higher-value products such as Black and Reserve helping finance growth categories, including Indian autorickshaws. Khosrowshahi made the same broader argument in May: profitable products and mature geographies support investment in promising markets.

Black can earn more from passengers willing to pay for a better-organised journey. Fleet partnerships can give Uber greater influence over vehicle quality and service standards. They also bring another business into the calculation: the fleet owner must earn enough to supply and maintain those vehicles.

A premium fare creates premium expectations. Punctuality, a clean car, professional conduct and competent support have to arrive with the vehicle. Uber cannot deliver the promise through a product announcement.

There is a more awkward question for its everyday service. How much reliability should a passenger have to pay extra to receive?

Black may improve the earnings from selected journeys. The larger battle remains the ordinary booking, where price and availability determine whether someone returns tomorrow.

Everything that moves needs a business model

“I want to wire up everything that moves,” Khosrowshahi said in May.

Uber’s Indian menu gives the ambition substance: bikes, autos, cars, premium journeys, intercity travel, bus tickets, corporate transport and deliveries. Each category offers another reason to open the app. Each also requires people, vehicles and demand to come together on workable terms.

Shuttle shows what happens when that arrangement falls short. Uber withdrew its fixed-route consumer bus service from Delhi NCR after March 27, following earlier exits from Mumbai and Hyderabad. It shifted its focus to employee transportation, pointing to predictable corporate demand and stronger vehicle utilisation. Kolkata’s consumer Shuttle withdrawal was separately reported for April 2.

The change is commercially revealing. An employer buying transport for staff offers a different commitment from individuals deciding whether to book tomorrow’s bus. Uber changed the customer and the operating model to seek a more dependable business.

Other services expanded. AbhiBus ticketing entered its Intercity offering, a different operation from running Shuttle, while Uber reported more than 3,000 Intercity cab routes.

These moves show a company testing how much of Indian mobility it can make pay. Expansion adds possibilities; withdrawal exposes the cost of discovering their limits.

For the passenger, the expanding menu has a simpler test. Can the app deliver the journey already booked?

The ride has to justify the return

Availability is only the first promise. The passenger also expects the quoted service, an appropriate vehicle and help when something goes wrong.

The complaint record reaches back years. In May 2022, the Central Consumer Protection Authority issued notices to Uber and Ola over issues including cash demands, refusals to switch on air-conditioning, cancellation charges and inadequate redress. The National Consumer Helpline recorded 770 Uber grievances between April 2021 and May 1, 2022. That is a historical record of complaints, not a measure of today’s failure rate.

The more recent safety agenda is equally practical. In October, the National Commission for Women called for stronger safeguards across app-based transport, covering driver and vehicle verification, route deviations, emergency response and complaint handling.

Uber’s October announcements included ambulance assistance and encrypted ride recordings. Their value is decided in the incident, when the call must be answered and the recording must help establish what happened. Putting a safeguard on the screen is the beginning of that responsibility.

Drivers have their own reasons to judge the service behind the app, including protection during a dispute and access to useful support. Recruiting them is one expense. Giving them enough reason to keep working on the platform is a continuing obligation.

Rapido’s audience lead does not establish superior safety. It does mean an alternative is already familiar to millions. A poor journey or an unresolved complaint can turn that familiarity into an opportunity for the rival.

The consequences reach beyond one lost fare. A passenger who stops returning leaves fewer bookings for drivers, making the platform less attractive to the very people Uber is spending to retain.

Rapido has money, and time

Rapido has the capital to pursue that opportunity. Prosus announced a $240 million primary round at a $3 billion valuation in 2026, describing a business operating in more than 400 cities.

Sanka’s stated objective was “building the density that gives captains reliable, predictable earnings”.

Density is the useful word. Signing up drivers achieves little if they spend the day waiting. Attracting passengers achieves little if no driver accepts. Concentrating enough demand and available vehicles in the same places can improve the working day on both sides of the booking.

That is the contest Rapido has pushed into the foreground. Its reach has expanded, its financing has strengthened and its pricing has helped change what drivers expect to pay a platform. Uber has responded with capital, subscriptions, flexible passes, recruitment spending and premium fleets.

The next India accounts will help show whether that response leaves more money in the business. The immediate test comes sooner, whenever a driver decides which request is worth accepting and a passenger decides which app deserves another try.

Uber’s difficult loop is easy to describe: spend more to secure drivers, recover the cost from passengers and risk giving Rapido another opening on price. Its global earnings can finance the search for an answer. The driver still has to make the day pay.

Uber can keep adding destinations to its app. Rapido is forcing it to count the cost of getting there.