Rappi: How is a bicycle courier service out of Bogotá becoming the face of the global economy?
By Ashley Lukasik
In the age of digital, who would have guessed that the fastest growing company in Latin America is a courier service delivering goods via bicycle and motorbike? Since its 2015 founding in Bogotá, Rappi has attracted over $300 million in investment funding and expanded to six countries and twenty-seven cities. I am told by Director of Operations, Nini Diaz, that by the time we visit them on our trans:form:ed Bogotá immersion program in February Rappi will be operational in sixty cities.
Rappi began by solving for a simple but universal problem in Bogota: traffic. Traffic is so intense that it can eat up a person’s entire day. I experienced this on my recent visit, where a ride from my hotel to the airport took only 15 minutes at 4 a.m. but was over two hours at 7 p.m. on a separate day. To help urbanites avoid unnecessary car trips, Rappi delivers over 50,000 products and services to their front doors—from a laptop computer to Starbuck’s latte to cash. Yes, you read that correctly. Rappi has figured out through their unique understanding of financial services and logistics how to get cash to their consumers when they need it.
Rappi’s offering is straightforward, tangible, even timeless. It requires no tech’d out vocabulary to understand. And yet, its long game value lives precisely within those abstract, emerging terms: big data, machine learning, artificial intelligence.
Their back-end system and operations take full advantage of emerging technology and the changing nature of work.
1. Global markets, local contexts.
Colombia is experiencing a unique surge in business and tourism since the signing of the peace accord. Suddenly, companies feel safe to do business there. In fact, several of Rappi’s backers are first-time investors in a Colombian company.
The company has a distinct knack for solving a very local problem through a business model that scales readily. They are only the second startup to surpass the $1bn valuation in Latin America, the first being the FinTech company Nubank, a participant in the Strategy Tour São Paulo that I produced in 2016.
2. Gig economy.
Like so many other startup breakouts, Rappi takes full advantage of the gig economy. Over 20,000 couriers are almost all working part time, making their own schedules and using their own modes of transport. Those of us in the U.S. often view this change in work culture as a disruptive trend, caused by technological shifts, that we’re evolving into. But in developing markets, the gig economy is not at all new. Rather, it’s the natural mode of participating in informal economic systems. My trans:form:ed partner, Ruben, told me there’s a term for this in Spanish, rebusque, which means to “look further”. The culture of rebusque in Colombia is all about having extra sources of income besides one’s regular job or vocation.
This is obvious when you look at examples of how quickly new technology is monetized. In many parts of Latin America WhatsApp has a channel-like subscription model in which users pay to be a part of certain conversation. This has been especially popular with Uber drivers and others who work mostly in isolation or outside of formal systems.
3. Machine learning.
Data is king at Rappi. In fact, with 20% monthly user growth and over five million downloads of the app, a number of global companies are clamoring to get access to the vast information they have on consumer behavior. Rappi has hired some of the best developers in Latin America to compute data from user purchasing activity to inform backend operations and logistics as well as tailor customized messages to everyone using their product. If I always buy beer on Friday nights, Rappi will know to check in with me at 5pm to ask if I’m ready for my delivery. And the more data that gets integrated into the system, the smarter it becomes.
Interestingly, Rappi’s model doesn’t yet include immersive qualitative research—something that design researchers and strategists in our cohort hang our hats on. On our visit with Rappi on the trans:form:ed trip, I’m curious to explore with the leadership how qualitative research may play a role in the future as Rappi matures and extends into other service offerings or domains.
What else might be made possible through a deeper understanding of customers’ full lives outside of the existing delivery services? How will Rappi shift from being predictive to responsive?
4. Youth culture.
The median age of Rappi’s over 100,000 employees is 25. At 27 herself, Nini tells me the true key to their success is their people. As a group, "we move fast and we are entrepreneurial.” It seems to be paying off.
Our trans:form:ed Bogotá participants will have the opportunity to chat intimately with Rappi’s leaders about their strategies for growth and partnership. We’ll then head down the block to a supermarket to observe the Rappi model from the courier perspective. For a company growing so quickly with the eyes of the global market upon them, Rappi is sure to evolve tremendously by then—we are more than a little curious to see what’s in store.