Ola - Ride-Hailing App
Founded in 2010, Ola is India's largest mobility platform and ride-hailing company operating in 4 countries.
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Founded in 2010, Karnataka-headquartered Ola is India’s leading mobility platform and ride-hailing company. It makes availing of cab services easier by connecting commuters with drivers via a mobile application. The platform provides on-demand cabs to customers at reasonable prices in more than 250 cities in India.
In 2015, Ola entered the unicorn club after raising over $900M from various investors in Series E and Series F funding rounds. The company’s latest funding was in December 2021 where it raised $139M in its Series J funding round led by Edelweiss, bringing its total valuation to $7.3B.
Ola is backed by notable investors like Softbank, Tiger Global, Tencent, Matrix Partners, DST, Temasek and Warburg Pincus Temasek. It is planning to go public in 2022 and hoping to raise $1B from the IPO.
Business Overview & Products
The primary services of the company include:
Ola Drive: Car-rental service with insurance cover and roadside insurance.
Ola Select: Membership-based service that allows customers to book rides without peak pricing and the ability to skip the booking queue with free in-car wifi among other benefits.
Ola Fleet: Ride Hailing services available for intercity and intracity rides with the following choices:
The company operates across India, Australia, New Zealand and the UK.
How It Works
Ola is a ridesharing company that provides cab booking services by connecting partners (drivers) with passengers via their mobile application.
The company does not own any of the cabs listed on its platform and only drivers with valid permits that are authorized and verified by transport authorities are allowed to sign up with Ola. To get listed on the platform, they have to go through a thorough inspection for authenticity. This includes due diligence of both the operator’s and driver’s commercial and personal papers. These drivers are either self-employed or work for an operator who owns multiple cars.
Drivers are referred to as partners at Ola, and upon registering with the company, they get access to a driver-specific mobile app. These partners have the option to log in to the app at their own time and decide whether to accept or decline request rides from customers.
As for customers using Ola, upon opening the app, their location is detected via portable GPS and the app then displays all the cabs available nearby such as Ola Share, Sedan, Mini, and Prime. Customers then select a cab according to their budget, as each cab’s price differs depending on characteristics like size, and luxury. After selecting a cab of their choice, they then have to enter a drop location and wait for the driver to accept their request. If the request is accepted, a confirmation along with the driver’s details is sent to the customer so they can coordinate together. After being dropped to their destination, the customer pays the driver through multiple payment methods available: cash, Ola money, Ola credit, debit/credit card, UPI payments, and more.
Along with easy payment options, the company also provides in-car entertainment with Ola Play – the world's most advanced connected car platform. Customers can listen to their favorite music, watch films or TV shows from the comfort of their Ola cab backseat. Moreover, if a customer is simply looking to rent a car then they can use Ola Drive, a self-driving service that rents cars to customers for anywhere between 2 hours and 3 months. Customers can drive to any part of the country without any worry since Ola not only covers the insurance of the vehicle but also provides roadside assistance for a hassle-free journey.
There also exists Ola Corporate for employees to make their work trips easier. Through this feature, employees can pay for their rides from their company’s pre-paid account, hence eradicating the need for travel reimbursements. Customers can also use Ola Select, a subscription-based membership program for premium benefits like free wifi, access to discounts and Ola events, priority booking, and no peak pricing.
In case of emergencies, Ola provides features like an emergency alert button and a live ride tracking option so that the customer’s family and friends can keep track of their travel route.
Business Model & Pricing
Initially, Ola’s business model was that of a taxi rental fleet business where it owned a fleet of cabs and customers had to call the company’s call center to book cabs. However, in 2015, the company decided to go digital by changing its business model to an app-based cab aggregation service. Now its two-sided network model connects customers seeking on-demand transportation with partners (drivers) listed on the platform via a mobile app.
Ola’s prime source of revenue is the 20% commission it charges on trips that are carried out through its platform. Trip fares on Ola are based on several factors such as distance, ride time, wait time, peak pricing, service tax, parking fees, convenience fee, advanced booking fees, cancellation fee, etc. The company also earns money from in-cab promotions and advertisements, cab-leasing programs, corporate accounts, delivery services, Ola Select and Ola Play.
Ola is India’s largest ride-hailing service and has been a dominant player in the industry ever since its inception. The company reported its first operating profit of $13M in 2021, however, that year its revenue declined 65% to $92M due to the coronavirus-induced lockdown that caused restrictions on travel and mobility. Moreover, Ola’s GMV is on the road to recovery as it crossed pre-pandemic levels in August 2021. The company also noticed a significant hike in customers with 10 million people trying their app for the first time in 2021 during the pandemic as more people moved towards private transportation in a bid to be safe from the virus.
According to their website, Ola:
Serves over 1 billion rides every year
Onboarded 1.5 million driver-partners on their platform
Operates in 250 cities
Has a team of over 7,000 employees
Founder(s) & Team
Bhavish Aggarwal: Co-Founder and CEO at Ola. Bhavish, an IITian, previously worked as Assistant Researcher at Microsoft Research India where he filed two patents and published 3 papers in international academic journals. He was also featured in Time magazine’s 100 Most Influential People of 2018 list.
Ankit Bhati: Co-Founder and CTO at Ola. Ankit, a fellow IITian leads product, engineering, and data sciences to ensure a seamless experience for both partners and riders. He has also co-founded Amnic, a SaaS startup that will be operating in the DevOps toolchain space.
History & Evolution
In 2010, Ola was founded by Bhavish Aggarwal and Ankit Bhatti after discovering a major gap in the cab industry. Initially, it entered the market as a taxi rental fleet business that would acquire a group of cars and hire drivers. To book a cab, customers had to call Ola’s call center and the cab would arrive at their destination at their desired time.
In 2015, Ola entered the online industry by moving its entire business into an app-based aggregation. It also changed its business model from purchasing cars to working as a mediator between customers and cab drivers via a mobile application. That year Ola acquired TaxiForSure, their rival in the taxi aggregator space and Geotagg, a trip planning app company. It also launched Ola Select, a subscription-based membership program that provides premium benefits to its customers.
In 2016, it acquired Qarth, a mobile payment startup; and launched its 2 wheeler motorcycle taxi service in Bangalore. That year it also launched Ola Play, an immersive in-car entertainment system for a connected in-car experience; and Ola Corporate for corporate travelers.
In 2017, Ola acquired Foodpanda, an online food delivery startup.
In 2018, Ola expanded its operations globally to Australia and New Zealand; and acquired Ridlr – a public transport ticketing and commuting app. That year the company also expanded to the UK by introducing auto rickshaws. Ahead of its launch, more than 10,000 drivers applied both in online and offline mode.
In 2019, Ola acquired Pikup.ai, an artificial intelligence (AI) startup; and launched a self-drive car rental service called Ola Drive.
In 2021, Ola launched a 10-minute grocery delivery service in Mumbai and Bangalore by setting up around 15 dark stores.
The company has also acquired GeoSpoc, a geospatial services provider to build next-gen location technology; and adopted Siemens’ Digital Enterprise to build India’s most advanced manufacturing facility.
Ola stands out from its competitors because of its business model which is customized to cater specifically to Indian consumers. For starters, the company provides small hatchbacks for an attractive price which not only resonates with a huge chunk of Indian commuters but also attracts a lot of drivers on the platform. This shows that hatchbacks are preferred by a large portion of the Indian market. Moreover, the easy payment options available help them create value for a larger customer base as most Indian commuters do not feel comfortable sharing their credit card details.
The company is often in the headlines for the wrong reasons, for instance in 2016, a privacy breach caused uproar in the media as customer details like names, phone numbers, and addresses were leaked to an individual in Chennai. Despite receiving complaints about these messages, OLA resolved this issue after 3 weeks, and that too due to media pressure. In 2015, the company’s driver-partners were under scrutiny when the Delhi Transport Authority questioned their credibility and inquiry revealed that 80% of the drivers did not have a permit to ply commercial transport services in Delhi.
In 2017, the global ride-hailing service market was valued at $36.4B and is expected to reach $126.5B by 2025 growing at a CAGR of 16.5% from 2018 to 2025.
According to data from Frost & Sullivan, India’s new mobility market is expected to hit $90B by 2030 whereas revenue from the ride hailing sector is estimated to reach $43.3B by 2025.
Suggested starting points to dive deeper
Failed a few times, but learnt from them, still took risks (Prerna Lidhoo, Fortune India, October 11, 2021)
Ola’s cabs business recovers to pre-pandemic levels ahead of IPO (Economic Times India, September 7, 2021)
From tech to manufacturing, Ola’s brave move (M Chandra Shekar, The Hindu Business Line, August 18, 2021)
How a Cab Ride for a Weekend Trip Prompted Bhavish Aggarwal to Start Ola Cabs (Sophia Graham, News 18, July 24, 2021)
How Ola is hunkering down to ride out the storm (Live Mint, June 10, 2020)