Ola Cabs, the largest ride-hailing service in India, offers multiple transportation services including regular and luxury car service, auto and bike rental service, rickshaw service, bus shuttle and their most recent offering: ride sharing. The Softbank-backed startup is with a great momentum. The number of drivers has grown significantly, from 10,000 in 2014 to 100,000 in 2015, and last year it counted 200,000 drivers. Ola has stated that it has plans to reach one million drivers on their platform by 2018. Ola is already operating in 100 cities in the sub-continent.
It’s biggest and most significant competitor is, of course, Uber. After merging Uber China into Didi Chuxing the last summer, Uber is hungrier to conquer India, showing the world that hasn’t renounced the whole area. At the end of December 2016, two months after Didi-Uber’s deal, Uber Co-Founder and CEO Travis Kalanick stated outright that he has no desire to invest in or merge with Ola in any way, which seems to indicate that Uber is confident they can overtake or equal Ola’s market share within India. This could spell trouble for Ola since Uber is better funded and has a much larger global presence and name recognition. Uber is quickly rising in India, and their Luxury car service offering is already more attractive than Ola’s. [Click here for Zirra full spotlight report on Ola]
Due to challenges from Uber, Ola has begun to expand into other avenues of service than simply providing rides, such as OlaCafe, a food on demand service, and OlaMoney, a partnership with YES Bank where customers can press a button for instant cash to be delivered by Ola.
One of Ola’s strengths has been their presence in the smaller towns, in which Uber has stated they are not as interested in. Ola believes its services can have the most impact in these places and is, therefore, seeking to further their presence there.
But Uber is not the sole competitor, albeit the biggest threat. Jet Fleet, a luxury car ride company, is becoming popular and challenges Ola’s luxury car service, and Jugnoo, a rickshaw ride service with $16 million in funding and two acquisitions is presenting an alternative to Ola’s rickshaw service. Meru Cabs is the most popular of the general city cab services within India, and has raised $75 million thus far.
Ola has faced significant problems in the last couple years such as technical issues with their app, molestation of riders by drivers and leakage of personal customer information. It has been riddled with bad press that has affected their image, and has responded by offering free coupons and limited discounted rides among other services in order to keep their clientele from choosing another company, in that way increasing significantly sales and marketing expenditures.
Although Didi is now expanding into Latin America and Lyft will probably expand into Canada, Ola is currently not interested in expanding overseas. Looking at southeast Asia, the market is already taken by Grab, another Softbank backed company and China is already 100% ruled by the unshakeable king Didi. Didi itself decided just recently to expand for the first time out of China to Latin America. In addition, Ola is locked within the ‘anti-Uber coalition’ a partnership created with Didi, Grab and Lyft, and is expected not to compete with them directly.
So How Much Is Ola Worth?
Zirra, a company that has developed AI and machine learning technology to effectively analyze the private tech market, has also produced interesting data on Ola. According to the valuation process, based on 85 different data sources, Zirra estimated Ola’s current valuation at $3.7-$3.8 billion. Zirra estimates that within a period of 2-3 years, Ola could go public or be sold for $5.4-$5.5 billion. It is far away from the $68 billion Uber’s valuation (only $52 billion, according to Zirra’s algorithms), but it still keeps Ola inside the prestigious club of the top 20 private tech companies in the world.[Click here for Zirra full spotlight report on Ola]