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Ola To Give Stiff Competition To Uber, Reports 70% Jump In Revenue

Ola To Give Stiff Competition To Uber, Reports 70% Jump In Revenue

Ola Posted A Revenue Of $190 Mn In 2016-17, Compared With $112 Mn In 2015-16

In its latest regulatory filings, Ola has reported a 70% jump in revenue in the year ended on March 31, 2017. According to the company filings with the ministry of corporate affairs, Ola posted a revenue of $190 Mn (INR 1,286 Cr) in 2016-17, compared with $112 Mn (INR 758.23 Cr) in 2015-16. The cab aggregator generated revenues from the commission it charges drivers.

In FY16, Ola had incurred a consolidated loss before tax of $360 Mn (INR 2,313.66 Cr). In the previous year, the company’s losses were about $123.9 Mn (INR 796 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.

Ola Vs Uber: Who Is Leading The Charts?

Cab aggregator Ola was founded by Bhavish Aggarwal and Ankit Bhati in January 2011. 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.

Ola’s biggest competitor is Uber, which has expanded rapidly since its entry into India about five years ago. Interestingly, both companies count Japan’s SoftBank Group Corp as an investor. In October last year, Ola raised $2 Bn from SoftBank Group Corp and Tencent Holdings. In January this year, SoftBank reportedly invested $1.25 Bn directly into Uber.

India is one of Uber’s most profitable markets. Uber India’s net profit increased by 52.3% to $4.7K (INR3.2 lakh) for the year ended March 2017, up from $3.1K (INR2.1 lakh) in FY16, according to filings with the Registrar of Companies (RoC) and data platform Tofler. Its revenue from operations increased 133% to $154K (INR 1.04 Cr) in FY17 from $63K (INR42.9 lakh) in FY16.

However, Uber has been facing losses in its global operations. It posted $1.5 Bn losses in the third quarter of 2017, compared to $1.46 Bn in the second quarter. In August 2016, Uber sold its China business to Didi Chuxing. Prior to that, the cab aggregator announced a $3.7 Bn merger deal with its Russian rival Yandex Taxi. However, at the end of 2016, its net revenue reached $6.5 Bn.

Uber has completed over 500 Mn rides across 29 cities in India. Its numbers surged by almost 2.5 times between June 2016 and June 2017.

In India, Ola and Uber have locked horns to acquire supremacy in cab aggregation. To keep Uber at bay, Ola will, however, need expand its reach to countries outside India. Ola has already set up teams in Dhaka in Bangladesh and Colombo in Sri Lanka. It has launched in Australia as well. Let’s see how it fares on foreign shores.

[The development was first reported by Livemint]