Ola shuts down TaxiForSure, 700 employees to be laid off
India’s largest taxi aggregator Ola has shut down TaxiForSure (TFS), a competitor it had acquired in March 2015 for an estimated $200 million to strengthen its position against rival Uber. The move will lead to 500-700 job losses, including employees in support services and business development, according to sources.business Updated: Aug 18, 2016 00:26 IST
Shape up or ship out seems to be the new mantra for startups in India, currently battling stressed market conditions.
India’s largest taxi aggregator Ola has shut down TaxiForSure (TFS), a competitor it had acquired in March 2015 for an estimated $200 million to strengthen its position against rival Uber. The move will lead to 500-700 job losses, including employees in support services and business development, according to sources.
Ola, however, declined to comment on the number of employees being laid off, and said it has absorbed “as many TFS employees for open roles in Ola to support growth.”
“For positions that cease to exist as a result of this transition, we are offering enhanced severance benefits and outplacement services to help affected employees pursue new career opportunities,” it added.
In a statement issued on Wednesday, the company also said the entry of Ola Micro, its low-cost AC cab service launched earlier this year, has replaced TaxiForSure. “TFS has contributed immensely towards Ola Micro’s success within a short span of time. Ola Micro has expanded to over 90 cities across India and accounts for the largest share of first-time cab users coming onto any mobility platform. With all TFS driver-partners and customers coming on board, the integration is complete.
At present, there are over 350,000 cabs and 100,000 auto-rickshaws and taxis on Ola’s network covering over 100 cities, including driver-partners who came on board after TFS buy.
Ola is currently entangled in an intense battle with Uber for leadership in the Indian market.
The competition is expected to intensify in the coming months as Uber expands its focus on India after selling off its China operations to Didi Chuxing, in a deal that values the merged entity at $35 billion. Interestingly, Didi is also a minority investor in Ola. Both Ola and Uber also have SoftBank as a common investor.
HT reported on Tuesday that Uber was likely to put in $1 billion (around ₹6,688 crore) in India, in addition to the $1 billion that CEO Travis Kalanick had promised to invest during his visit in January.
Uber has a balance sheet of $11 billion, and a lot of that is likely to come to India.