You have competition every day because you set such high standards for yourself that you have to go out every day and live up to that. — Michael Jordan
In a real-life example of the “survival of the fittest” theory, Bhavish Aggarwal and Ankit Bhati have led Ola from strength to strength since its inception in 2011, making it a leader to contend with in the cab-hailing industry in India.
So much so that its success attracted global ride-hailing companies like Uber to try their luck in the Indian market, even as many others such as TaxiForSure and Meru Cabs failed to survive the tough industry.
UK Dreams: Ola’s Plans For The UK
Ola has obtained licences to operate in South Wales and Greater Manchester and will launch operations in South Wales within the next month.
The company claims to be the only ride-hailing app in the UK that offers passengers the option of private hire vehicles (PHVs) and Black Cabs through its platform. It plans to incorporate additional transportation options on its platform in future.
Ola is working with local authorities across the UK to expand nationwide by the end of 2018.
The company is also leveraging its driver-focused approach and, at the same time, is addressing passenger safety concerns through measures such as Disclosure and Barring Service (DBS)-screened drivers. It will also offer 24/7 voice support, options to share ride details with emergency contacts, and in-app emergency features in the UK.
Bhavish Aggarwal, co-founder and CEO of Ola, said, “Ola is excited to announce its plans for the UK, one of the world’s most evolved transportation markets. The UK is a fantastic place to do business and we look forward to providing a responsible, compelling, new service that can help the country meet its ever demanding mobility needs. We look forward to our continued engagement with policymakers and regulators as we expand across the country and build a company embedded in the UK.”
Ola Offers Lower Commissions To Take On Uber
Ola is moving fast to set up its UK operations. Today (August 7), Ola announced openings for PHVs and metered taxi drivers in Cardiff, Newport, and the Vale of Glamorgan. It is offering an introductory commission rate as low as 10% for PHVs and 5% for metered taxis.
The company’s introductory low commissions have worked well for it in Australia — a key market for its major global rival Uber.
Inc42 had earlier reported that Uber drivers in Perth, Australia, are now urging their customers to switch to Ola so they can earn more per ride.
Since its entry in Australia in February, Ola has been wooing driver-partners to get them to sign up on its platform by offering an introductory commission rate of 7.5% (to be charged by Ola) — a market low — as well as the option of daily payment.
In the same way, Ola is entering UK at a time when Uber is facing a $650 Mn (£500 Mn) class action lawsuit from drivers of the iconic London black cabs, who claim that Uber has operated “unlawfully” since launching in London in 2012 and had the intention of “causing loss to the licensed taxi trade.”
Uber has 40,000 drivers in London. This comes in line with Uber’s recent battle to hold on to its operating licence in London.
It is also to be noted that Uber recently exited the difficult Southeast Asian market by selling its Southeast Asian arm to Grab, a Singapore-based ride-hailing company, and taking a 27.5% stake in the enlarged group.
In the last two years, Uber has also left some of its biggest emerging markets. In August 2016, it sold its China business to rival Didi Chuxing.
Similarly, in July last year, the company called it quits in the Russian market. The cab aggregator announced a $3.7 Bn merger deal with its Russian rival Yandex.Taxi, which is owned and operated by the Baltic search engine giant Yandex.
Further, amid this, the balance sheet of the company was marked red in many places — it posted $1.5 Bn losses in the third quarter of 2017, up from its $1.46 Bn in the second quarter.
Ola Aims To Be Profitable, Wants Global Ride
In a recent letter to employees on achieving money on every ride, Bhavish Aggarwal said that the company has not sacrificed top-line growth or ceded market share to Uber to achieve this goal.
Aggarwal wrote in the email that Ola is aiming to become profitable this year. “We will continue to focus on profitable and sustainable growth, and building a growing profitable business, the first in Indian internet,” he added.
In FY17, Ola’s operating loss increased 32% to $543.5 Mn (INR 3,731 Cr) while its operating revenue more than doubled to $171.6 Mn (INR 1,178 Cr).
Till March 2018, Ola had raised funding of $3.9 Bn in 11 rounds from about 20 investors. It is currently present in 110 cities with over 1 Mn driver partners. It has 14 service categories and ferries 2 Mn people every day.
The company was reportedly in talks with Singapore’s sovereign wealth fund Temasek and other investors to raise another $500 Mn to $1 Bn in funding.
Time and again reports have surfaced that Ola is looking to set up operations in New Zealand, other countries in Asia and North Africa.
Reports also claimed that the company has already set up teams in Dhaka, Bangladesh, and Colombo, Sri Lanka.
As Ola ventures into the UK’s $11.5 Bn taxi market, it has a lot of groundwork to do to take on major global players to replicate its India success on foreign shores.