Ola Consumer Explained

Ola
Type:Private
Industry:Transportation
Food Industry
Successors:-->
Hq Location City:Bangalore, Karnataka, India
Num Locations:250+ cities
Area Served:India
Products:Mobile app, website
Revenue: (FY23)[1]
Net Income: (FY23)
Num Employees:~3,000
Num Employees Year:2020
Parent:ANI Technologies[2]

Ola Consumer (stylized as OLΛ), formerly Ola Cabs, is an Indian transportation company that provides ride-hailing services and operates other business verticals such as financial services and cloud kitchens. It is headquartered in Bangalore, and operates in 250+ Indian cities.

A variety of venture capitalists including Softbank have large stakes in the company.[3] In January 2018, Ola extended into its first overseas market, Australia, and launched in New Zealand in September 2018.[4] In March 2019, Ola began its operations in the UK.[5] In April 2024, the company announced that it is exiting all of its international markets to focus on the Indian market.[6]

History

In 2010, Bhavish Aggarwal established Olatrip.com, a trip planning company operating in the Delhi region. In January 2011, recognizing a growing demand for on-demand cab services, Aggarwal and co-founder Ankit Bhati launched Ola Cabs, a taxi aggregation firm.[7] It originally allowed users to make bookings via phone call, before introducing its mobile app in June 2012.[8] By early 2015, Ola reportedly had the biggest market share, followed by TaxiForSure, Meru Cabs, and Uber, which was launched in 2013.[9] [7]

In March 2015, Ola Cabs acquired rival TaxiForSure for 1,237 crore (US$200 million).[10] In June 2015, Ola integrated TaxiForSure services on the Ola mobile application.[11] In August 2015, Ola was reported to be operating in over 100 cities and became an app-only service.[12] Later in the year in November, Ola acquired Geotagg, a trip-planning applications company, for an undisclosed sum.[13]

In a move to expand beyond cab aggregation, Ola acquired the struggling foodtech company Foodpanda India with an eye on leveraging the growing food delivery segment business in December 2017.[14] In April 2018, Ola acquired Ridlr (formerly Traffline), a public transport ticketing app.[15] Later in August 2018, Ola financed Series A funding of the scooter rent startup Vogo, and again in December, invested another $100 million.[16]

In 2019, more than 10,000 drivers applied both in online and offline mode, ahead of its launch in London. In February 2020, Ola launched its taxi-hailing services in London with over 25,000 drivers registered.[17]

Ola posted its first-ever operating profit of in the financial year 2020–21.[18]

In April 2024, Ola announced it was pulling out of all international markets – UK, Australia and New Zealand markets with only a few days notice.[19] [20]

In May 2024, Ola migrated from Microsoft Azure to its own cloud platform Krutrim.[21] In July 2024, Ola shifted from Google Maps to a new in-house mapping tool, Ola Maps.

On August 18 2024 Bhavish Agarwal rebranded ola cabs as ola consumer.[22]

Subsidiaries and services

Apart from the ride-hailing business Ola Cabs, the holding company ANI Technologies operates Ola Fleet, Ola Financial Services, and Ola Foods.[2] As of September 2019, it also owns a 6% stake in the electric scooter manufacturing company Ola Electric.[23]

Ride hailing

Ola Cabs offers different levels of service, ranging from economic to luxury travel.[24] The cabs are reserved through a mobile app and also through their website, and the service accepts both cash and online payments. It claims to clock an average of more than 150,000 bookings per day and commands 60% of the market share in India as of 2014.[25] As of 2019, the company has expanded to a network of more than 1.5 million drivers across 250 cities.[26]

In November 2014, Ola diversified to incorporate auto rickshaws on a trial basis in Bengaluru.[27] After the trial phase, Ola Auto expanded to other cities like Delhi, Pune and Chennai, starting in December 2014, and also in Hyderabad.

In March 2016, it introduced bike taxi service on its platform.[28] Ola has faced legal troubles in many states where operating bike taxis is illegal.[29] [30]

Ola Fleet

In January 2015, Ola acquired radio taxi company GCabs for an undisclosed amount and renamed it as Ola Fleet Technologies.[31] Ola Fleet is engaged in leasing of cabs to partnered drivers.[32]

Ola Foods

Ola entered food delivery segment in March 2015 under the name Ola Cafe, but stopped the services in March 2016.[33] [34] It began offering food delivery services again in December 2017 with the acquisition of Foodpanda's Indian subsidiary for an undisclosed sum. Ola also announced that it would infuse up to $200 million in the food delivery unit.[35] While the number of users and orders went up in 2018 due to discounts and offers, the numbers dropped sharply in early 2019. In June 2019, it stopped food delivery service and laid off most of its 1,500 delivery executives. However, it continued to operate Foodpanda's cloud kitchen business.[36] As of 2021, Ola Foods operates more than 50 cloud kitchens, including its flagship brand called Khichdi Experiment, in six cities.[37] [38]

Ola Financial Services

In November 2015, Ola launched its mobile payments and wallet product called OlaMoney.[39] OlaMoney is owned by Ola Financial Services, which also offers other financial products such as buy now pay later, insurance, co-branded credit cards and vehicle loans in partnership with other financial institutions.[40] [41] [42]

Ola Maps

In October 2021, Ola acquired GeoSpoc, a Pune-based geospatial technology company. Founder Bhavish Aggarwal wrote in a blogpost that the acquisition would help the company convert satellite imagery into web maps.[43] In July 2024, Ola launched Ola Maps as alternative to Google Maps API, with Aggarwal urging Indian developers to use India-based solutions.[44]

Defunct services

Ola Dash

In July 2015, Ola launched Ola Store, a grocery delivery service in Bangalore, before shutting it down in March 2016.[34] [45] In November 2021, Ola Store returned with quick delivery of grocery and essentials, starting with a pilot launch in Bangalore.[46] By January 2022, Ola set up 200 dark stores across 9 cities, and rebranded the service as Ola Dash.[47] In April 2022, Ola Dash scaled down its operations from 9 cities to 3 cities and dismissed over 2,100 contract workers.[48] [49] In June 2022, it shut down Ola Dash in all cities.[50]

Ola Cars

In October 2021, Ola launched its new and pre-owned car marketplace called Ola Cars in 30 cities, which was also expected to sell new vehicles of Ola Electric and other brands.[51] [52] By May 2022, the company had scaled down operations to 17 cities.[53] In June 2022, it closed Ola Cars across all cities and stated that Ola Cars' "infrastructure, technology and capabilities will now be repurposed towards growing Ola Electric’s sales and service network."[54] In August 2024 Ola Electric a subsidiary of Ola that manufactures electric powered two wheelers (scooter) went public through and IPO in India. Shares of the company surged 20% on opening day.[55]

Ola Pedal

Ola launched a bike sharing service in December 2017.[56]

Criticism

Technology

Ola Cabs' technology came under criticism regarding the security of its mobile app. The API calls could be replayed to top up its wallet.[57]

In August 2016, a privacy breach occurred when customers' details such as names, phone numbers and addresses, in Bangalore, were received as SMS messages by an individual in Chennai. Although these unanticipated messages were reported to Ola, the company ignored them, even under the threat of being reported to the TRAI.[58] The issue was reportedly fixed three weeks later after receiving considerable media coverage and social media attention.[59]

On January 19, 2020, a technical glitch caused multiple users to receive notifications such as "Your ride is on the way" or "Your ride is here" despite them not even attempting to book through the platform. In some cases, cancelling the ride even attempted to automatically book another ride.[60]

Billing and payment issues

The refund policy of Ola Cabs has been criticised because of charging errors caused by technical glitches in their system.[61] Surge pricing has been an issue with customers, as Ola is said to initially eliminate competition by lowering prices, and then hiking up prices through what it calls surge pricing. The fact that the same ride can cost different amounts depending on the time, day and the profiles, history and rating of the driver as well as passenger has also attracted criticism.

Charges comprise:

Driver concerns

In December 2016, drivers protested outside the Kukatpally, Hyderabad office of Ola, demanding more transparency over payments.[63] From January 2017, Ola was criticised for continuously dropping the driver incentives which in turn was affecting driver-partner's monthly income.[64]

Ola and Uber have also been criticised due to their practice of baiting drivers and passengers, initially with discounts and bonuses, and then hiking up fares without passing the proceeds to drivers. Their practice of taking large signing up amounts from drivers and not considering them employees has also been criticised. Both companies contractually treat drivers as "contractors" thus excusing themselves from any legal obligations.[65] [66]

Assaults on and Murders of Ola cab drivers

There have been 11 cases of murders, and over 90 cases of kidnapping and robbery of drivers working for app-based cab aggregators including Ola, by criminals posing as passengers using fake profiles.[67] The most recent case happened in the city of Pune in June 2019 when a passenger killed the driver to steal his car.[68] Two other murders of Ola drivers by robbers took place in New Delhi and Agra respectively.[69]

Congestion externalities

A recent study has shown that Ola may be contributing significantly to congestion in three major Indian cities – Mumbai, Bangalore and New Delhi.[70] The adverse congestion effects were found to be the highest in the busiest areas of each city during peak hours. The study also reported that many who use these services would have otherwise used more efficient forms of public transport, such as the Delhi Metro.

Driver credibility

Delhi Transport authority in early 2015 questioned the credibility and required verification of drivers working for Ola, along with other competitors such as Uber. The inquiry revealed that approximately 80% of drivers amongst all services did not possess permits to ply commercial transport services in Delhi.[71]

License suspension

In March 2019, the Karnataka state transport department suspended Ola's operating license for six months for violation of license conditions and violation of Karnataka On-Demand Transportation Technology Aggregator Rules, 2016, on account of Ola running bike taxi services though it only had license for four wheeler taxi operations. The company stated that it was working with driving partners to continue functioning and was in touch with authorities to sort things out.[72]

Sexist Ad controversy

In 2016, Ola advertised an ad which created controversy for its sexist portrayal of women.[73] It created protest from the social media, following which the ad was removed.[74]

Notes and References

  1. News: Sil . Debarghya . Ola Cabs Parent ANI Tech's FY23 Revenue Crosses INR 2,500 Cr Mark, Loss Declines To INR 772 Cr . 16 January 2024 . Inc42 Media . 10 January 2024 . en.
  2. News: Bhalla . Tarush . Ola posts operating profit in FY21 ahead of likely share sale . 15 November 2021 . mint . 2 November 2021 . en.
  3. News: Would an Ola-Uber Merger in India Get the Competition Commission's Approval? . 19 March 2019 . The Wire . 29 April 2018.
  4. News: India's Ola forays into New Zealand in latest overseas push. 18 September 2018. Reuters. 18 September 2018.
  5. News: Shrivastava . Aditi . Next pickup is London for Ola . 1 January 2022 . The Economic Times.
  6. News: 2024-04-09 . Ola Cabs to exit international markets this month . 2024-04-19 . The Economic Times . 0013-0389.
  7. News: Ola: Taking India On A Ride . 12 January 2024 . Forbes India . en.
  8. News: SN . Vikas . Olacabs Offers Real-Time Cab Booking On Mobile; Single Click; Our Take . 12 January 2024 . MediaNama . 13 June 2012.
  9. News: How Ola and Uber are making other taxi companies irrelevant in India . 12 January 2024 . Business Today . 12 August 2015 . en.
  10. News: Ola buys TaxiForSure for Rs 1,237 crore in a cash-and-stock deal . 12 January 2024 . The Economic Times . 3 March 2015.
  11. News: Ola cabs app and Taxi For Sure get into a relationship. Twitter trolls prove how complex it is. Business Insider India. Suchayan. Mandal. 25 June 2015.
  12. News: Dalal . Mihir . Ola to shut website, turn into app-only platform starting August . 12 January 2024 . mint . 29 July 2015 . en.
  13. Web site: Ola confirms it has shut down TaxiForSure, the rival it acquired for $200M. TechCrunch. Jon. Russell. 17 August 2016.
  14. News: Uber rival Ola buys Foodpanda India to get into food deliveries. Russell. Jon. 18 December 2017. TechCrunch. 20 December 2017. Oath Inc..
  15. News: Ola Acquires Mumbai-based Public Transport Ticketing App Ridlr. Chaudhary. Suman. 3 April 2018. 3 April 2018. IndianWeb2.com. 5 April 2018. https://web.archive.org/web/20180405025619/https://www.indianweb2.com/2018/04/03/ola-acquires-mumbai-based-public-transport-ticketing-app-ridlr/. dead.
  16. Web site: Ola, Uber's India rival, invests $100M in scooter rental startup Vogo. TechCrunch. 18 December 2018 . en-US. 2018-12-18.
  17. Web site: Ola starts in London with over 25,000 drivers. Business Traveller. en-GB. 2020-02-28.
  18. News: Bhalla . Tarush . Ola posts operating profit in FY21 ahead of likely share sale . 1 January 2022 . mint . 2 November 2021 . en.
  19. Web site: Evans . Lauren . 2024-04-09 . Global rideshare service abruptly shuts down across Australia . 2024-04-09 . skynews . en.
  20. Web site: 2024-04-09 . Ola Cabs to exit international markets this month . 2024-04-09 . Economic Times. en.
  21. News: Ola moves tech workloads out of Microsoft's Azure, says Bhavish Aggarwal . 2 August 2024 . Business Standard . 22 May 2024.
  22. Web site: Bhavish Aggarwal introduces Ola Maps as an alternative to Google Maps..
  23. News: The Curious Case Of Bhavish Aggarwal And Ola Electric . 23 November 2021 . Moneycontrol . en.
  24. Web site: Ola aims to counter Uber with its Biz-class service. The Economic Times. 2 September 2014.
  25. Web site: Ola now has $250-300M annual gross transaction run rate; peek at its numbers – VCCircle. VCCircle.com. 19 November 2014. Sainul K. Abudheen. 1 February 2015. 28 February 2017. https://web.archive.org/web/20170228130811/http://www.vccircle.com/news/technology/2014/11/19/ola-now-has-250-300m-annual-gross-transaction-run-rate-peek-its-numbers. dead.
  26. Web site: Inside the data driven model of Ola with Sanjay Kharb, VP- Engineering, Ola – ET CIO. 2 November 2019. ETCIO.com.
  27. Web site: 20 November 2014. Now Book Auto Rickshaws in Bangalore via Ola Cabs. NDTV Gadgets.
  28. News: Ola, Uber launch bike taxi service in Bengaluru today; price as low as Rs 2 per km . 24 November 2021 . The Financial Express . 3 March 2016.
  29. News: Menezes . Naveen . Peermohamed . Alnoor . Karnataka suspends Ola permit for six months over bike taxis . 24 November 2021 . The Economic Times . 23 March 2019.
  30. News: Ola suggests government way to legalise bike taxis; asks banks to ease loan process for drivers . 24 November 2021 . The Financial Express . 17 March 2020.
  31. News: Chakraborty . Sayan . Ola invests Rs50 crore in cab leasing unit Ola Fleet . 24 November 2021 . mint . 1 March 2017 . en.
  32. News: Ola waives off lease rentals for driver-partners . 24 November 2021 . The New Indian Express.
  33. News: Ola Launches Food Delivery Service in Select Cities . 28 January 2022 . NDTV . en.
  34. News: Pillai . Shalina . Ola shuts down its grocery and food delivery services . 28 January 2022 . The Times of India . en.
  35. News: Russell. Jon. 18 December 2017. Uber rival Ola buys Foodpanda India to get into food deliveries. TechCrunch. Oath Inc.. 20 December 2017.
  36. News: Salman S.H. . Varsha Bansal . 2019-05-22 . Ola drops Foodpanda delivery, lays off several employees . LiveMint . 2020-06-05.
  37. News: SH . Salman . Ola Foods holds QSR plans, to focus on meal kits and private brands . 11 November 2021 . mint . 9 September 2020 . en.
  38. News: Soni . Yatti . Ola Foods plans to launch a burger brand . 11 November 2021 . Business Line . 20 October 2021 . en.
  39. News: Verma . Shrutika . Ola enters mobile payments space with Ola Money . 24 November 2021 . mint . 13 November 2015 . en.
  40. News: SH . Salman . Ola's financials services arm raises ₹200 crore, CEO Nitin Gupta quits . 11 November 2021 . mint . 26 May 2020 . en.
  41. News: Ola Financial Services to expand insurance business internationally . 11 November 2021 . Business Standard India . 8 November 2021.
  42. News: Panday . Amit . Ola launches credit card in tie-up with SBI Card . 11 November 2021 . mint . 16 May 2019 . en.
  43. News: Bhalla . Tarush . Ola buys GeoSpoc to boost real-time mapping prowess . 16 August 2024 . Mint . 5 October 2021.
  44. News: 2024-07-08 . Use Ola Maps: Bhavish Aggarwal urges developers to exit Google maps . 2024-07-09 . The Economic Times . 0013-0389.
  45. News: Inside Ola's plan to crack the food and grocery delivery market, again . 28 January 2022 . Moneycontrol.
  46. News: Ola begins pilot of quick grocery delivery service in Bengaluru: Report . 28 January 2022 . Business Standard India . 5 November 2021.
  47. News: Ola plans aggressive push for Ola Dash in crowded quick-commerce arena . 28 January 2022 . The Economic Times.
  48. News: Ola Dash: 10-minute grocery delivery service decides to go slow . 27 June 2022 . Financial Express . en.
  49. News: Sahay . Priyanka . Toms . Manu P. . Ola restructures quick-commerce business, ends contracts of 2,100 workers at Ola Dash dark stores . 27 June 2022 . The Economic Times.
  50. News: Ola to shut Dash, its quick commerce business, and merge cars unit with electric division . 27 June 2022 . Moneycontrol . en.
  51. News: Ola launches Ola Cars platform for buying, selling, financing vehicles . 11 November 2021 . mint . 7 October 2021 . en.
  52. News: Ola Cars eyes $2 billion in GMV in 12 months, to hire 10,000 people . 11 November 2021 . The Economic Times.
  53. News: Soni . Yatti . Ola Cars to shutdown operations in five cities . 27 June 2022 . www.thehindubusinessline.com . 6 May 2022 . en.
  54. News: Ahluwali . Prachi . Ola shuts down its used car business to invest in electric vehicles . 27 June 2022 . The Times of India . 27 June 2022 . en.
  55. Web site: Singh . Manish . 2024-08-09 . Ola Electric surges 20% in India's biggest listing in two years . 2024-08-19 . TechCrunch . en-US.
  56. Web site: Anupam . Suprita . 2017-12-04 . Cab Aggregator Ola Introduces Bicycle-Sharing Service Ola Pedal . 2024-06-17 . Inc42 Media . en.
  57. News: Taxi aggregator Ola hit by tech glitches that allow free rides. The Economic Times. Varun. Aggarwal. Malavika. Murali. 20 March 2015.
  58. Web site: Ola Cabs Accidentally Reveals Customer Data To Chennai Girl, And Doesn't Care . Indiatimes.com. Kunal . Anand. 30 August 2015.
  59. Web site: Ola leaked its customers data, claims user; company blames manual error . The Indian Express . 1 September 2015.
  60. Web site: Sil. Debarghya. 2021-01-20. Technical Glitch: Ola App Sends False Booking Notifications To Users. 2021-01-21. Entrepreneur. en.
  61. Web site: Decoding OLA Cabs Billing Issues – Ola ka Gola!. 13 May 2015. Trak.in.
  62. Web site: Peak Pricing: The what, why, and how of it |. blog.olacabs.com. 10 March 2015 .
  63. News: Ola, Uber drivers call for 5-day strike to protest against low earnings . 12 January 2024 . Business Standard.
  64. News: Ola, Uber cut driver pay by a third in 1 year . 18 September 2017 . economictimes.com.
  65. News: Ola, Uber and the Precarious Future of Blue Collar Platform Workers . 19 March 2019 . The Wire . 26 March 2018.
  66. Book: Ravi Agrawal. India Connected: How the Smartphone is Transforming the World's Largest Democracy. 1 October 2018. Oxford University Press. 978-0-19-085867-4. 74.
  67. Web site: Archived copy . 3 July 2019 . 3 July 2019 . https://web.archive.org/web/20190703185620/https://dbpost.com/not-only-passengers-even-cabbies-are-at-risk-of-getting-killed/ . dead .
  68. News: Pune: Two men book Ola cab to murder driver, steal car . 3 July 2019 . Express News Service . June 24, 2019 . The Indian Express . June 24, 2019.
  69. News: HT Correspondent . Delhi Police arrest two men for Ola cabbie's murder . 14 August 2019 . Hindustan Times . August 29, 2018.
  70. Agarwal . Saharsh . Mani . Deepa . Telang . Rahul . The Impact of Ride-hailing Services on Congestion: Evidence from Indian Cities . SSRN . 2020.
  71. News: 80% of Uber, Ola does not have permits to ply in Delhi, says minister. The Indian Express. 19 June 2015.
  72. News: Ola cabs banned in Bengaluru for licence violation – Times of India. The Times of India. 2019-03-23.
  73. News: Social . Team . Video: Ola Cabs' new 'sexist' ad pulled down after public outrage . 2024-05-08 . The Times of India . 0971-8257.
  74. Web site: Ola Pulls Down Controversial Ad After Outrage On Social Media . 2024-05-08 . NDTV.com.