Professional Documents
Culture Documents
ON
BUSINESS PLAN OF OLA CABS
EXECUTIVE SUMMARY
Vision
The vision behind Ola cabs is to provide hassle-free, reliable and technology-efficient car
rental service to Indians. In a deeply fragmented and highly unpredictable market of car/taxi
services, there is a significant shortage of easy and comfortable on-ground options for
transportation, be it within a city or outside.
Revenue Model
Runs on a pay- for- performance model.OLA charges a commission in whatever sales they
make. Also to get access to technology platform. OLA charge taxi owners a small fee.
Technology
The mobile app is not what makes Olacabs different from the several radio taxi services that
have sprung across the country. Bhavish Aggarwal, co-founder and chief executive officer of
the company, describes Olacabs as a technology firm rather than a cab-services firm. One of
his ambition is to be able to deliver a cab within 20 minutes from the time of booking. For
this, the company is making use of data analytics, so that they can forecast demand for its
services on a daily basis. Based on this data analysis we intend to providing service within 20
minutes of booking. At present it is around 30-35 minutes.
Target Market
The Indian radio taxi market alone is pegged anywhere between $6-$9 billion dollars by
different estimates, and is forecasted to grow at 17-20% annually. More importantly, the
organised taxi market is still minuscule as compared to rest of the taxi market in India; it
constitutes only 4-5% of the market in terms of sheer number of vehicles. The rest is by
operators who own fleets of 2-50 cars and typically have a presence in 1 or 2 cities. Ola cabs
is targeting three sectors of market that is providing services to customers for outstation, city
taxi and local rentals. These services are offered by making variation in fleet those are
luxury , sedan, hatchback and Ola mini.
Financials
In 2012, the company had raised over $5 million in its Series A funding from Tiger Global.
Prior to that, it had raised angel funding from a bunch of individual investors, including
Rehan Yar Khan and Anupam Mittal. November 2013, Olacabs had raised its Series B round
of funding led by Matrix Partners India for a big minority stake, with participation from
existing investor Tiger Global Management. Although the company had not disclosed the
amount at the time, media reports pegged it at $20 million. Prior to that, it had raised Rs 19.2
crore ($3.2 million) from existing investor Tiger Global in July the same year, which was
believed to be part of the same round. It raised Rs 250 crore ($41.8 million) in its Series C
round of funding led by Hong Kong-based hedge fund manager Steadview Capital and
Silicon Valley-based Sequoia Capital. Existing investors Matrix Partners India and Tiger
Global Management also participated in this round. Olacabs had raised $210 million in its
Series D round led by Japanese internet and telecom giant SoftBank. The proposed
fundraising, which would be its Series E or fifth round of institutional funding, it is back in
the market to scoop between $300-500 million more, would strengthen its position as the
most heavily funded player in its business.
Management
Olacabs, founded in January 2011 by two IIT Bombay alumni Bhavish Aggarwal and Ankit
Bhati is Indias largest aggregator of car rentals and point-to-point cab services. Olacabs
integrates car transportation, be it point-to-point services within a city, hour-based rental
services or outstation travel, onto a technology platform, ensuring convenient, transparent and
quick service fulfillment for the customer. Right now, were a two-member team Ankit is the
CTO and handles the technical aspects, from building the website, building the backend
platform, scaling servers etc. Im the CEO and I handle the operator partnerships, sales and
operations. And yes, we are looking at hiring like- minded and passionate people for
technology and product development roles.Ola has also hired professionals for corporate
affairs, public policy, marketing and category management among others.
"We look for people who have a shared vision in shaping something futuristic and have done
it in their own," said Bhavish Aggarwal, co-founder and CEO, Ola Cabs.
This led to the business idea of using technology to offer a better and more predictable
experience to consumers, right from easy online access to car rental bookings, quality
assurances through reviews/ratings and proper information about the car and the driver.
Our market is large enough because Indias rate of vehicle ownership is low to 41 per 1000
people and ranks 128th worldwide and therefore our company has a strong belief that there is
an opportunity for population to leap frog automobile ownership altogether and instead rely
on booking services like ola cabs. The population of India is 1.2 billion which is large enough
for our company to capture the market. It is estimated that the radio taxi market in India is
$6-9 billion dollars growing at 17-20%. It is also estimated that the number of taxis in the
organized sector will reach 30,000 by 2017. The entire ground transportation industry in
India is run in a very opaque, inefficient and ad-hoc manner. There is no service guarantee or
price transparency for the consumer and operators are also troubled with no structured
channel through which customers can be sourced. We believe that technology will help make
this industry efficient and drastically improve the consumer experience in years to come.
Olacabs provides cab-booking services to customers through multiple channels but it does not
own any cabs. "We are a technology company. We are a technology platform for
transportation. We help connect customers and drivers better," said the Olacabs CEO .Most of
the existing portals work as opaque agents, offering marked-up rates. Olacabs, on the other
hand, has a marketplace approach. We tell users the rates of different operators along with
what accessories and features each car has. So, users can compare and book the one which
suits their needs the best. The rates displayed are also exact fares that a customer would get
directly from the operator.
Also, most cab booking portals are plain vanilla websites with price listings. Our strategy is
to focus on the backend interface with car operators because that would ensure a certain level
of quality and predictability with respect to the consumer experience. We intend to bring all
car operators and all taxis on to a single technology platform to enable real time inventory
distribution, nationally.
Unique offerings
Customers can book cabs through its apps, website and even call centre. Recently, it launched
the facility of cashless payment by offering an in-app pre-paid wallet will allow customers to
recharge their account through a credit card. The firm also began making auto bookings
available on its platform in beta mode across six cities in India including Bangalore, Mumbai,
Delhi, Chennai, Pune and Ahmedabad. Another new category that is currently in beta mode is
Ola Pink, cabs driven by women drivers and is only for women passengers in Bangalore. It
also started adding the conventional black & yellow cabs of Mumbai to its platform.
Recently, the firm roped in Gurgaon-based background-verification firm AuthBridge to vet
the drivers.
Among the other initiatives, the firm released an SOS button for customers, which, when
activated, sends out all ride details in real-time including GPS coordinates to pre-set friends
and family members of the user via SMS and e-mail.One of his ambition is to be able to
deliver a cab within 20 minutes from the time of booking. For this, the company is making
use of data analytics, so that they can forecast demand for its services on a daily basis.
Ola Primes business class experience fleet includes cars like Toyota Innova, Altis, Skoda
Rapid and Honda Civic. Ola Mini shall remain the most affordable personal transportation
option in the city and its fleet include hatchbacks like Tata Indica and Nissan Micra amongst
others. The flagship Ola Sedan is aimed at a regular city traveler looking for a spacious car
and comfortable drive and is currently available across all 12 cities where Ola is present and
includes cars like Suzuki DZire, Mahindra Verito and Toyota Etios.
MARKET ANALYSIS
The taxi space in India is heating up and has been seeing a phenomenal growth in the past 6-7
years. Over $400 Mn (INR 2400 crores) of VC money has been pumped in into these
companies in the past 4 years itself.
Olacabs recently raised over $210 Mn in Series D from Softbank at a valuation of over $1 Bn
to focus on expansion. TaxiforSure also raised over$30 Mn in its latest round while Uber has
a warchest of over $1.5 Bn to fuel its international expansion. Uber has also committed
almost $400 Mn to grow and promote its service in India.
The Indian radio taxi market alone is pegged anywhere between $6-$9 billion dollars by
different estimates, and is forecasted to grow at 17-20% annually. More importantly, the
organised taxi market is still minuscule as compared to rest of the taxi market in India; it
constitutes only 4-5% of the market in terms of sheer number of vehicles. The rest is by
operators who own fleets of 2-50 cars and typically have a presence in 1 or 2 cities.
With this in perspective one can now see why each player is trying to aggressively expand
and is raising such humungous funding rounds. The aggregators like Ola, Uber and TFS have
just conquered less than 3-4% of the total available market of India so far and have a huge
opportunity in front of them.
Starting Up:
Olacabs started its operations in 2010 from Mumbai under the name of ANI
Technologies Pvt. Ltd.
TaxiForSure.com started its operation in 2011 from Bangalore under the name
of Serendipity Infolabs Pvt. Ltd.
Uber started its operations in India in 2013 starting from Bangalore, but the
parent company operates under Uber Technologies Inc, incorporated in the state
of Delaware, US
Going Mobile:
OlaCabs launched its Mobile App on Android first, followed by iOS in 2012
followed by Windows in 2014
TaxiForSure launches its Mobile App on Android & iOS in 2013 followed by
Windows in 2014
Uber started its operations in India (2013) with Android and iOS apps. Uber
App on Windows platform is published by Caro Apps
OlaCabs provided a lot of promo codes on their website to give huge discounts
in various segments. They also started the trends of providing fixed rate drops to
the airport when they launch in a city
OlaCabs provides cabs at INR 13 per kilometre whenever Auto Unions call a
strike
TaxiForSure provides promo codes on Tuesdays
Uber is way ahead in marketing as they did campaigns during elections
(providing Uber at a discounted rate for voting), UberStud (to encourage referral)
and free credits while introducing a new customer. Recently they launched Ubber
Chopper by which you can ride a chopper and have a view of your citys skyline
In the initial phase of the market companies owned the complete fleet with the drivers as
salaried employees. This was characterized by high capital costs to the company car loan
EMIs, high maintenance costs. While this model facilitated rapid expansion, it also came at a
huge cost. Caused high stress levels in drivers and there were driver strikes that affected the
service.
Bookings were mainly done via telephone calls and cash was the dominant model.
Phase 2 Fleet Aggregation Model
Companies like TaxiForSure and Ola started this model where small fleet owners or single
car owners can put the company brand on the car, and get registered with them. Cars are free
to take up non-company rides, but for every company-initiated ride, they pay the company a
fixed percentage as commission. This model had low capital expenditure and lower
maintenance costs.
Booking was done via telephone calls as well as through their websites. While cash was still
the dominant payment form, in-cab POS terminal for credit / debit cards started being used as
well in this phase.
Phase 3 The Hybrid Model (Current Phase)
In this model part of the fleet is owned by the company and part of the fleet is from an
aggregation model, hence providing the best of both worlds better control on cab
availability and service quality while keeping costs low.
Booking are done via telephone, website as well as mobile apps and the payments via cash,
card and wallets.
FINANCIAL ANALYSIS
For 2013-14, ANI Technologies, which runs Ola Cabs, reported a 50 per cent jump in net loss
at Rs 34.21 crore (Rs 342.1 million), against Rs 22.80 crore (Rs 228 million) in 2012-13,
according to filings with the Registrar of Companies.
TaxiForSure, also facing a nationwide ban, has widened its loss, too. Serendipity Infolabs, the
holding company for TaxiForSure, reported a loss of Rs 17.08 crore (Rs 170.8 million) for
2013-14, compared with a profit of Rs 3.02 crore (Rs 30.2 million) the previous year.
For 2013-14, Meru Cab Company, which runs Meru Cabs, reported its maiden profit, of Rs
3.55 crore (Rs 35.5 million).In 2012-13, it had recorded a loss of Rs 31.11 crore (Rs 311.1
million).As of March-end this year, the companys accumulated loss stood at Rs 215.24 crore
(Rs 2.15 billion).
Mega Cabs, which owns and has been operating taxis round the clock across six cities since
2001, reported a loss of Rs 2.55 crore (Rs 25.5 million) on revenue of Rs 36.37 crore (Rs
363.7 million) for 2013-14.
The company, which claims to have the largest radio taxi network in India, had posted a net
profit of Rs 12.18 lakh (Rs 1.21 million) on revenue of Rs 39.55 crore (Rs 395.5 million) the
previous year.
In terms of revenue, Ola Cabs, backed by private equity funds Tiger Global and Matrix
Partners, has reported solid growth.Its Rs 51-crore (Rs 510-million) revenue in 2013-14 was
219 per cent higher than Rs 16 crore (Rs 160 million) the previous financial year.
TaxiForSure, backed by Hellion Ventures and Accel India, had revenue of Rs 4.29 crore (Rs
42.9 million) in 2013-14; Meru Cabs did not disclose its revenue details.
There are 19 radio taxi operators in the country, including Mega Cabs, Easy Cabs, Meru Cabs
and Tab Cabs, according to the Association of Radio Taxis.These operators run about 25,000
cabs across India, generating combined revenue of Rs 70,000-80,000 a cab every month, the
association says.
Of these, Easy Cabs is operated by Carzonrent (India), which also has other businesses such
as a personal ground transportation service.It offers short- and long-term car rental solutions
through its fleet of 6,500 cars.
Quick Cabs, which runs about 1,000 radio taxis in the National Capital region, had not filed
financial details with RoC till the filing of this report.
Lately, Indias taxi services market, despite its financial stress, has received increased
attention from global investors, primarily because of the fact that the radio taxi model has
emerged as the fastest-growing and most reliable form of public transport for the worlds
second-largest population.
There are about 600,000 taxis in India, generating combined annual revenue of about Rs
11,000 crore (Rs 110 billion).
Ola Prime A business-class car service for luxury travel available in a few cities
offering bigger cars like Toyota Innova.
Ola Sedan A regular-class car service aimed at providing the customers a spacious
car for comfortable travel with cars like Toyota Etios.
Ola Mini An economic-class car service to serve customers looking for affordable
personal transportation with cars like Tata Indica.
Ola Pink A car service driven by a lady driver service lady travellers.
Ola Auto An auto service provided to the customers, removing the need for
haggling the price with the drivers.
The cabs can be reserved through a web browser or a mobile app. This cab service supports
both cash and cashless payment options with Ola money. It clocks an average of more than
150,000 bookings per day and commands 60 percent of the market share in India.
FLAT RATE
Non airport pickups and drops
Standard Rate
Category
Minimum bill
Extra km charges
Sedan
Rs 13 per Km
Rs 2 per min
Mini
Rs 10 per Km
Rs 2 per min
* Waiting time includes time taken to board the cab after pickup time as well as waiting
during the trip.
Prime Rate
Category
Minimum bill
Extra km charges
Prime
Rs 18 per Km
Rs 2 per min
Extra charges
Peak Time Surcharge
Airport rate
All airport pickups and drops.
Additional toll charge of Rs 75 will be applicable.
Standard Rate
Category
Minimum bill
Distance charges
Sedan
Rs 16 per Km
Rs 2 per min
Mini
Rs 13 per Km
Rs 2 per min
Prime Rate
Category
Minimum bill
Distance charges
Prime
Rs 18 per Km
Rs 2 per min
Ola Advantage
* First 10 mins of waiting time is FREE (only for standard rates)
* No night charges
* Transparent pricing * Invoice mailed at the end of ride
Ola in an exclusive chat that the money raised would be used to aggressively expand into new
cities, categories and strengthen the cab aggregator's driver ecosystem in a highly competitive
market. The startup has raised around $65 million of funds in three rounds of institutional
funding.
Ola, which works on the marketplace model, has 11,000 cabs across nine cities on its
platform and is said to be clocking 12,000 bookings per day, 50% of which are through its
mobile app. The need for quick and efficient point-to-point transport is very large in urban
India. Ola is the leader in addressing this via technology, benefiting both consumers and
drivers.
Ola is growing 30% month-on-month with Ola Minis seeing the sharpest growth. Having
started off by offering only sedans, Ola recently introduced Minis and Luxury cars to broaden
its portfolio. Ola Mini is 20-30% cheaper than fares charged on sedans and competes with
UberX directly.
The new entrants in the taxi service market work on the asset-light model where, instead of
owning the fleet themselves, they facilitate driver entrepreneurship. Ola, in fact, helps drivers
in financing loans at lower interest rates for the purchase of their cars and has tie-ups with car
manufacturers.
The overall Indian cab market, estimated at about $4 billion, has seen some frenetic activity
of late with VCs lining up top dollars to push transportation startups employing technology to
disrupt the traditional taxi services business.
Olacabs has raised Rs 250 crore of fresh funds, valuing the taxi service start ups at over Rs
1,000 crore. This catapults the three-year-old company into the big league of India's
consumer internet story. India focused-hedge fund Steadview Capital and Silicon Valley's
blue-chip VC firm Sequoia Capital led the latest round of fund-raise, which also saw
participation from existing investors Matrix Partners India and Tiger Global
Ola's valuation has more than doubled since November last year when it got on board Matrix
Partners in a Rs 120-crore fund-raise. It now joins the likes of other consumer internet
startups Quikr, Zomato and Bookmyshow which have crossed the Rs 1,000-crore valuation
figure , this list does not include e-commerce players such as Flipkart and Snapdeal.
Ola has more than 33,000 registered users on its platform and it has seen 9x growth in
monthly bookings in January-October 2014. It claims that Ola commands 60 per cent market
share in India, followed by Meru (16 per cent), TaxiForSure (14 per cent) and Uber (5 per
cent).
Olacabs is looking at an aggressive ramp-up to increase its presence four-fold to 200 cities by
the end of this year from 64 cities at present, according to the source.
It claims to have 60,000 cabs on its platform serving two lakh customers daily. The company
has added over 15,000 cars to its platform in the last three months and has launched
operations in over 34 new cities during this period. It says it has been adding over 1,000 cabs
to the platform every day.
Olas mobile wallet was introduced in October last year and the company claims that firsttime users of this tool are growing at the rate of 40 per cent per month.
The firm also began making auto bookings available on its platform in beta mode across six
cities in India including Bangalore, Mumbai, Delhi, Chennai, Pune and Ahmedabad. Another
new category that is currently in beta mode is Ola Pink, cabs driven by women drivers and
is only for women passengers in Bangalore.
Heres what else happened in 2014:
We used to add around 10 cars a day and now we add 1000 cars a day.
We also made huge gains on mobile, with almost 70% of our bookings coming from
mobile app, up from 20% last year
MARKETING PLAN
Calling a cab is just a tap away. Mumbai-based Olacabs is among the first in India to have
launched an application that allows you to book a cab by just tapping on your phone. Having
gained traction in Mumbai, the company is now expanding to Bangalore and Delhi.
With a few taps on the Olacabs application on any of the android-based phones, users can
call a cab. The company uses GPS technology to let users book a cab.
The company, describes Olacabs as a technology firm rather than a cab-services firm. One of
his ambition is to be able to deliver a cab within 20 minutes from the time of booking. For
this, the company is making use of data analytics, so that they can forecast demand for its
services on a daily basis. Based on this data analysis company is intended to provide service
within 20 minutes of booking. At present it is around 30-35 minutes. The company has a
small team managing the data analytics for better forecasting in Mumbai.
Since the company has became operational in Mumbai for more than a year now, the
company has generated enough data. Company also make use of demographic details while
evaluating a region. The demand visualisation is done on a daily basis, so that accordingly we
can have our cabs in areas where demand is high at specific hours.
Unlike other radio cab services provider, Olacabs is an aggregator of car rental service. The
company does not have any inventory of cabs. We have focused on creating a technology
platform that will act as an umbrella for small car rental firms.
Olacabs is addressing point-to-point cab services, outstation cab services and full-day rental
services. So far, Olacabs have been successful in getting 600 suppliers on board with 1,000
cabs in Mumbai. In Bangalore where it started services a month back, it has 100 suppliers,
and Delhi which is still in pilot mode also has 100 suppliers.
The company claims to do 2,000 bookings on a daily basis. We want to take this to 3,000 per
day by the end of this month. Almost 50 per cent of these bookings come from its mobile
applicaThe new service will offer the same starting fare as autorickshaws, that is, Rs 13 per
km but with a base fare of Rs 100 for the first six kms, making it the cheapest AC cab service
available in the city.The price point is so basic and 13 per km is extremely affordable.
Someone who has to take an auto will have to think twice now. With Ola the customer has a
hassle-free commute. With the touch of a button, a cab comes to your door, takes you where
you need to go. Not a single word, you pay your fare at the end and go. Since the past three
months weve had a great testing time.
Taxi aggregation company Ola cabs on Tuesday launched its low cost service called Ola Mini
across three cities and flagged off a new 'Business Class' service Ola Prime, across six major
metros.
Ola will offer AC compact cars like Tata Indica, Vista and Ford Figo under the Ola Mini
service. Customers can book the cabs online by calling Olas call center or through the Ola
mobile app. With Ola Mini, customers will also get the usual cutting edge services like the
ability to book and track the cab through their mobile phones, e-mailed receipts, accurate
meter and well trained professional drivers.
The launch by Ola Cabs signals a tough fight ahead for country's new age start-ups such as
TaxiForSure, Uber, Meru and Mega cabs who are eyeing for a share in India's $6 billion taxi
rentals market.
Bangalore based Ola has 18,000 cabs across 12 different cities along with three different
product lines. The 3-year old company has launched Ola Prime, a business class service for
customers with a fleet that will include cars like Toyota Innova, Skoda Rapid, Honda
Civic etc.
The company has priced Ola Prime between Rs 17 to Rs 20 per km across different cities,
almost similar to the rates that Uber and Meru Cabs are charging in various cities.
We have arrived at these offerings based on our understanding of travel patterns in these
cities over the years and the results derived from our analytics exercise that brought to light
the price points which different customers will find attractive. The company announced the
launch of the low cost 'Ola Mini' across Mumbai, Chennai and Pune Ola Prime has been
launched across six cities of Bangalore, Delhi, Mumbai, Chennai, Pune and Jaipur.
In a bid to get users to experience cab services and bypass auto-rickshaws Ola Mini has been
priced at Rs 10 per km with a base fare of Rs 100, thus targeting long distance city travelers,
who rely typically on a bus or metro for local transportation.
Ola Cabs, mobile application for cab bookings, has partnered with the famous black and
yellow cabs in Mumbai. With the new partnership Ola has included black and yellow cab
bookings on their mobile application. Presently, Ola has tied up with a fleet of 2,000 cabs and
will operate between Bandra west and Colaba in Mumbai.
Currently we have partnered with 2,000 cabs, but down the line we have plans to increase the
fleet to 20,000 within the next six to seven months.
For inclusion of the black and yellow cabs in their application, Ola Cabs has provided
smartphone devices to 2,000 drivers without any charge. Each smartphone contains the Ola
app which has been uniquely designed to book these cabs. By using the cab, a customer can
see all the partnered cabs around him, by entering the location and confirming the request the
drivers in the vicinity will be alerted though the smartphone. Customers have a option of
selecting the normal black and yellow cab or a cool cab. The pricing for these cabs will be the
regular charges set by the government.
The Ola application is available on the Windows, IOS and the Android platform.
Overcoming challenges
Today, the car rental industry in India is pegged to be at US $6 billion, growing by 20 per
cent annually. While this presents a huge opportunity for companies such as Olacabs to grow
in this space, it is also fraught with regulatory and infrastructural challenges. As a first, there
is no policy framework around the market. We more or less created the market and that leaves
us with the responsibility of setting a high benchmark. Secondly, given that Ola relies largely
on mobile and Internet data to deliver customer experience and process transactions,
connectivity poses a challenge at certain locations across cities. To tackle this, the company is
in the process of developing alternate devices that are less reliant on mobile and Internet data.
The third challenge lies in the lack of proper road infrastructure and connectivity. We dont
have a good mapping system in place, so we have to rely on Google maps.
Like any other startup, Olacabs builds its brand presence by interacting with its customers on
social media and advertising on radio and other mass media. The company, however, focuses
most of its energy on the customer and its branding activities are accelerated only when they
launch in a new city.
In the next five years, Olacabs is looking to create a presence in 10 to 12 metro and Tier-II
cities and make transportation economical, efficient and effortless for everyone. In all, our
goal is to empower the operators as entrepreneurs and hence deliver great customer value.
FINANCIAL PLAN
Funding
It raised $330k in its initial round of funding on April 21, 2011. The company received Series
A funding of $5 million from Tiger Global Management; Series B funding of USD 20 million
from Matrix Partners and Tiger Global; Series C funding of $41.5 million from Steadview
Capital, Sequoia Capital and its existing investors. In Series D round of funding on Oct 25,
2014, it raised $210 million from SoftBank Internet and Media Inc. and its existing investors.
It is back in process to scoop between $300-500 million more in its series E funding.
REVENUE
For 2013-14, ANI Technologies, which runs Ola Cabs, reported a 50 per cent jump in net loss
at Rs 34.21 crore, against Rs 22.80 crore in 2012-13, according to filings with the Registrar
of Companies (RoC).
In terms of revenue, Ola Cabs, backed by private equity funds Tiger Global and Matrix
Partners, has reported solid growth. Its Rs 51-crore revenue in 2013-14 was 219 per cent
higher than Rs 16 crore the previous financial year.
We also use heat maps to efficiently manage the demand and supply of cabs in various parts
of a city at different points in time. The traffic alerts using information from various sources
including social media help in guiding the drivers to reach the destination in the shortest
possible time. Both these help in effective inventory management for Olacabs. We plan to
scale quickly as we have an asset-light and technology-focused business model. Also, with
the capital raised from Tiger Global, we plan to significantly ramp up our technology
infrastructure.
There are customers who use us multiple times for point-to-point services, in a day. We
intend to bring all car operators and taxis pan-India on to a single technology platform to
enable real time inventory distribution.
SBI says that it will provide loans at an average rate of 13% and the daily repayment amounts
would be about Rs 500- 600. Its also reported that cars financed by SBI will have GPS for
enhanced safety.
Olacabs had initiated a similar program to fund drivers, but out of its own pocket,
in partnership with Milaap. The program involved sending a message to the driver on
Milaaps platform which would contribute Rs.100 towards buying a new car.
At a time when the online taxi aggregation industry is struggling with high demand and low
supply, Bengaluru-based Ola (previously Ola Cabs) on Friday launched a daily loan
repayment program for drivers, in association with the country's largest lender State Bank of
India (SBI).
Under the program, which has been named 'Ola Pragati', SBI will offer car loans to drivers
who work with Ola under a daily repayment scheme as against the current practice of equated
monthly installment (EMI). The program will also give the benefit of a lower down payment
and faster clearance of loans for Ola drivers.
Drivers who avail a loan under this program will need to continue working with Ola for 60
hours a week for a stipulated period of time, depending on the terms of their loan. If they
choose o change the operator that they work with, their loans would be converted into a
regular car-loan with SBI.
As per the program, a driver can get a loan for a down payment of just 10%, with an average
interest rate of 13%. The loans under the scheme will be cleared within 24 hours and the
repayment amount for drivers is estimated at Rs 500-600 per day. EMI is best suited for the
salaried class. Drivers have a cash inflow on a daily basis and for them to pay a lump sum at
the end of the month is difficult.Ola expects at least 1,00,000 driver entrepreneurs enrolling
under the Ola Pragati program in the next couple of years.
The company said that the daily payment mechanism gives the financing institution better
visibility of loan repayment and more lending comfort. The program will work in sync with
the daily settlement process of Ola drivers.
Ola currently operates in 67 cities and clocks over 2,00,000 rides per day. The company has
launched several initiatives in the past to encourage drivers.
Recently, Ola had set up a fund of Rs 100 crore to enable drivers buy their own cars and turn
driver entrepreneurs. The company has run several initiatives in the past two years to support
drivers.
OWNERSHIP
Olacabs, founded in January 2011 by two IIT Bombay alumni Bhavish Aggarwal and Ankit
Bhati is Indias largest aggregator of car rentals and point-to-point cab services. Olacabs
integrates car transportation, be it point-to-point services within a city, hour-based rental
services or outstation travel, onto a technology platform, ensuring convenient, transparent and
quick service fulfillment for the customer. Customers can access Olacabs, on the web,
through a mobile app or through a customer service centre. Currently, Olacabs currently
operates in Mumbai Delhi and Bangalore and is rapidly expanding to other cities.
SWOT ANALYSIS
STRENGTH
High Market share
Pan India footprint
High degree Customer care services
Promotions
High degree customer flexibility
Boom in Smartphone and internet
capability
Advanced location tracking GPS
system.
OPPORTUNITIES
The fast extending market
WEAKNESS
Price competition from MERU cabs,
easy cabs etc.
No significant product differentiation
from competitors.
Complaints of Booking cancellations
THREATS
High degree of new entrants into
market at a great pace.
Unexpected government regulations