Ola is India’s largest mobility platform. The Indian taxi-hailing industry is valued to be close to $10 billion. A lucrative and relatively untapped market such as this is bound to attract a lot of attention from entrepreneurs in India and around the world. Capitalizing on this opportunity, Bhavish Aggarwal and Ankit Bhati launched India’s very own cab-hailing start-up, Ola.
Ola was founded in Dec 2010 by two IIT Bombay graduates Bhavish Aggarwal and Ankit Bhati with a mission to build mobility for a billion people. Ola became one of the fastest-growing startups in India, beating its global rivals Uber and Meru Cabs.
OLA is one of the world’s largest ride-hailing companies, serving 250+ cities across India, Australia, New Zealand, and the UK. The Ola app offers mobility solutions by connecting customers with the drivers and a wide range of vehicles across bikes, auto-rickshaws, metered taxis, and cabs, enabling convenience and transparency for hundreds of millions of consumers and over 1.5 million driver-partners.
Ola’s core mobility offering in India is supplemented by its electric-vehicle arm, Ola Electric; India’s largest fleet management business, Ola Fleet Technologies, and Ola skilling that aims to enable millions of livelihoods opportunities for India’s youth. With its acquisition of Ridlr, India’s leading public transportation app, and investment in Vogo, a dockless scooter sharing solution, Ola is looking to build mobility for the next billion Indians. Ola also extends its consumer offerings like micro-insurance and credit led payments through Ola Financial Services and a range of owned food brands through India’s largest network of kitchens under its Food business.
Story Behind OLA
Homegrown cab aggregator startup Ola Cabs was born when Bhavish Aggarwal found himself stranded in the middle of the road on his way to Bandipur from Bangalore while trying to keep his holiday and tour planning business afloat. Bhavish had to travel from Bangalore to Bandipur, for which he rented out a car, which ended in a very bad experience. The driver stopped the car in the middle of the journey and demanded a higher price as part of the renegotiation of what Bhavish was paying. After being refused, he abandoned him to in-between his destination. This is when he realized the problem of a lot of customers across the country who were looking for a quality cab service but ended up with a one that stood them up, arrived and dropped them off late, didn’t stick to their promises, and came with drivers that were nightmares behind wheels. For the first time, he saw the amount of potential that an extraordinary cab booking service could have, and hence, he changed his business from his earlier start-up to the one we today know as – OlaCabs.
This was in December 2010, where he was joined by his co-founder Ankit Bhati in his start-up journey. Instead of buying and renting out their cars, OlaCabs partnered with several taxi drivers and added a touch of modern technology to the whole set up, where people could book cars at short notice through their call centers and from their app. The bookings allowed half/full day rental and even outstation taxis. Ola has almost 4,000,000 cabs across the country, offering a variety of car options such as– Auto, Mini, Prime Sedan, Prime SUV, and Prime Play – which can be paid for through one of the different modes available.
Bhavish who worked 16 hours a day, promises transparency in prices, where OlaCabs gets a commission on every sale that the taxi driver makes, which makes it a company that works on the pay-per-performance model. The taxi drivers can also opt for access to the technology platform benefits by paying a minimal fee to OlaCabs.
The duo behind Ola
Bhavish is the Co-Founder & CEO of Ola, one of the world’s largest ride-sharing platforms and India’s most popular mobile app for transportation. With the mission of building mobility for a billion people, he started Ola (formerly Ola Cabs) in 2010 with Ankit Bhati, a fellow alumnus from the Indian Institute of Technology in Mumbai, the country’s premier institution for technology and science.
Before Ola, Bhavish worked with Microsoft Research for two years, filing two patents alongside having three papers published in international academic journals. True to his belief of the need to have on-demand consumer transportation as a service, Bhavish doesn’t own a car himself and vows that he never will.
Ankit is the Co-Founder & CTO of Ola, one of the world’s largest ride-sharing platforms and India’s most popular mobile app for transportation. With the mission of building mobility for a billion people, he started Ola (formerly OlaCabs) in 2010 with Bhavish, a fellow alumnus from the Indian Institute of Technology in Mumbai, the country’s premier institution for technology and science.
At Ola, Ankit leads product, engineering, and data sciences, ensuring a strong back-end system that powers the experience of riders and driver-partners alike. Scaling Ola in a short span of time, he has played a lead role in pioneering technologies such as mapping innovations, the world’s first connected car platform – Ola Play, and offline bookings that made Ola accessible for a large segment of the population.
Revenue Model of OLA
Ola has a very simple revenue model. OLA acts as a facilitator in providing cab-booking services. It doesn’t own any of the cabs of its own. The drivers with valid permits duly authorized and verified by transport authorities can sign up with OLA.
The drivers get access to a driver mobile app on their devices as soon as they register with OLA. This is done only after a thorough check of authenticity and conducting due diligence of commercial papers and personal papers of driver and operator. The drivers have the flexibility to decide their own time to log in to the OLA app and accept requests for rides from customers. Ola charges a commission of around 15% on all the bookings done through the app.
OLA Funding: Billion-dollar Funding Saga
The start-up received $92 million (650Cr INR) from Ex-Flipkart co-founder Sachin Bansal. This is the largest investment by any individual in Ola to date.
Earlier in January 2019, Ola raised $74 million from its existing investor, a Hong Kong and London-based hedge fund, Steadview Capital, through preference shares at a subscription price of $301 per preference share. The funding round is expected to take Ola’s valuation to over $6 billion.
Challenges encountered by OLA
Like every startup, Ola’s founders too faced a lot of difficulties and challenges. They had to work long hours and sometimes Ankit had to code for long hours while Bhavish had to ride the cab himself and complete the cab booking. Back in 2010-11, internet connectivity in India was very poor. So another problem they faced was networking connectivity issues. The majority of the population did not have access to the internet which was quite expensive and some had used 2G connections. So they had to develop an app that could be easily used on the 2G network.
Like every other industry, the Taxi-hailing market took a hit by the pandemic. The initial lockdown forced the cab aggregators like OLA to halt their operations. The COVID-19 virus, which is resetting consumer behavior towards the usage and adoption of different services and pushing businesses to revise their growth strategies for the post Covid19 world, might also challenge cab-booking businesses to address hygiene concerns for consumers on a war footing.OLA had to lay off 1400 employees as lockdown hits revenues.
As part of ‘Ride Safe India’, OLA has earmarked ₹500 Crores which is going towards various initiatives to enhance safety including a stream of technology advancements and additions to the deep cleaning regimens. The Ola app has been redesigned to make it COVID-ready with the in-app integration of the AarogyaSetu to provide added assurance.