In a move that could bring a sigh of relief for Cab hailing app Ola, Chennai-based radio cab company, Fast Track has said that it is ready to withdraw a complaint registered with the Competition Commission of India (CCI) against Ola, if it receives a commitment that it will stop discounting and hold down driver incentivisation.
It is to be noted that earlier in this month, Fast Track filed a complaint against ANI Technologies, the parent company of Ola, alleging contravention of provisions of section 3 and 4 of the relevant Act. Following which, the commission directed the Director-General to investigate the matter and complete it within 2 months.
Fast Track had also said its revenue per month has come down to INR 9.5 lakh from INR 23 lakh, and it is fast losing drivers to a layered daily and monthly incentive system from Ola. The company said that it has found it a task maintaining driver count after the entry of Ola in Chennai.
The firm further alleged that heavy inflow of venture money has helped Ola cut prices and reward drivers. In its submissions to CCI, the company said that Ola loses INR 230 a trip after earning INR 344 for what is a service priced in the market at INR 574.
Speaking on this matter, Redsun C Ambigapathy, Founder & Managing Director, Fast Track said, “If Ola would give us a written submission on stopping these practices, the board will consider pulling the case out.” However, Ola refused to comment on this development.
“Ola’s app focus cuts cost in order booking, which is a large money guzzler through staff costs. It is focussed more on ploughing its revenue back into the ecosystem by incentivising drivers and investing in creating new drivers through bank tie-ups,” said an industry expert.