India’s ride-hailing major, Ola has signed a MoU (Memorandum of Understanding) with Government of Assam for a pilot project of river taxi services in Guwahati.
At the ongoing Global Investors Summit: Advantage Assam at Sarusajai Stadium, Guwahati, MoU was signed in the presence of Chandra Mohan Patowary, Minister for Transport, Parliamentary Affairs, Industry and Commerce and Vijay Ghadge, VP of Operations of Ola.
Commenting on the development, the Minister said, “Assam has a unique transportation landscape where water transport plays an important role in cities such as Guwahati. We are certain that bringing a localised mode of commute on an app platform will enable convenient transportation for citizens and tourists alike.”
Ola was launched in Assam in December 2014 and has offered its services for local, long distance, inter-city and state commute.
In an official statement, Ola said that app-based bookings of water taxis will streamline demand and enable advance bookings and cashless payments for the people.
The river taxi will be a machine-operated boat, a faster and safer mode of travel than its conventional alternatives. Ola will pilot high-speed taxis on the Lachit Ghat, Machkhowa to North Guwahati route, bringing the commute time down to 2-5 minutes from 45 minutes by road.
Vijay Ghadge, VP of Operations at Ola, said, “Convenience and safety of the commuters are paramount to us. Our aim is to stand out as a reliable choice of transportation for the country. As a part of this endeavour, we are delighted to partner and work with the Government of Assam to enhance and empower the local transportation infrastructure.”
The development comes at a time when Ola is exploring international waters.
Recently, Ola has opened its doors for operations in Australia by inviting private hire vehicle owners in Sydney, Melbourne, and Perth to learn more about driving and registering with Ola. However, there are no further details available yet.
Ola is also in talks to launch its operations in New Zealand, while it has landed in trouble in Sri Lanka already.
Ola’s Sri Lankan rival PickMe has accused Ola of “commercial espionage”. A local court has summoned three Ola executives Karan Veer Singh Shekhawat and Nimit Joshi, who are also directors of ANI Technologies Lanka Ltd, and Murali Barath, the local subsidiary and operations manager, to present before it on February 26.
Ola’s Story So far
Ola currently offers its cab and auto services in more than 110 cities.
Ola has raised a total investment of $3.9 Bn in 11 rounds of funding from about 20 investors. Its major stake owner has continuously been Japan’s SoftBank Group. In Ola’s $500 Mn Series F funding round of November 2015, companies like Didi Chuxing, Baillie Gifford, Falcon Edge Capital, Tiger Global, SoftBank Group and DST Global had participated.
Reportedly, a valuation report filed with the ministry of corporate affairs compiled by chartered accountancy firm Jain Ambavat and Associates, showed that Ola is projected to become profitable during 2018-19 and report a net operating profit of over $180.7 Mn (INR 1,170 Cr), which is further expected to grow further to $992 Mn (INR 6,423.33 Cr) by FY 2020-21.
Ola has been innovating and exploring its range of facilities to gain a foothold in the price-sensitive Indian market. The company offered carpooling services, autorickshaws, Ola Play, etc and is also in talks to develop its own EV autorickshaws to explore the segment.
The company has also forayed into food delivery business in December 2017 by acquiring FoodPanda for $31.7 Mn (INR 202 Cr). After the announcement, Ola committed to investing $200 Mn in Foodpanda. The online food services market in India is expected to reach $2.9 Bn 2019.
According to a report by RedSeer Consulting, Indian online mobility market, which includes cab aggregator and auto-hailing verticals, have seen a substantial growth last year. As per the report, these two categories contributed over 15% of the industry’s overall gross book value (GBV) in 2017.
With India’s leading cab aggregators, Ola and Uber, doing their best to stay strong in Indian market while exploring international markets is a multi-tasker for overburdened companies.
However, this development of Ola’s MoU with Government of Assam for river taxis is definitely a win-win situation for Ola.