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Ola wants a slice of global ride-hailing market, too

Uber, which is increasingly trying to expand its market in India, will now see more of Ola in the coming weeks.

tech Updated: Jan 30, 2018 14:30 IST
Manish Singh
Manish Singh
Hindustan Times
Ola Cabs,Ola Australia,Uber
Ride-hailing market: It’s Ola vs Uber vs Lyft vs Grab(Ravi Choudhary/HT PHOTO)

As Uber, Didi, Lyft and Grab battle one another for slice of the world’s ride-hailing market, they now have a new competitor to worry about: Ola.

Ola, which holds the tentpole position in India’s ride-hailing market, said on Tuesday it has started to accept registration from drivers in Australian cities Sydney, Melbourne, and Perth, and will make its service available in the country in early 2018.

In Australia, Ola will battle Uber and Taxify, which entered the nation only a month ago. To lure the drivers, the company said it will charge a 7.5% commission from drivers, which is lower than 25% that Uber charges, and 15% that Taxify does from its drivers.

It will be new a headache for Uber, which has been fighting with Ola in India for the country’s $10 billion ride-hailing market for more than four years. Ola has more than 125 million users in India and operates in 110 cities in the country, while Uber operates in under 30 cities. Ola serves more than a billion ride in the nation each year, compared to Uber, which completed its 500 millionth ride, throughout its stay in India, just last July.

In Australia, however, Uber has the upper hand, where its marquee service as well as UberEats food delivery business is growing. The arrival of Ola in Australia comes amid a slow down in India’s ride-hailing market.

Ola co-founder and chief executive Bhavish Aggarwal said he sees “immense potential” for the ride-sharing ecosystem in Australia.

“With a strong focus on driver-partners and the community at large, we aim to create a high-quality and affordable travel experience for citizens and look forward to contributing to a healthy mobility ecosystem in Australia,” he added.

The anti-Uber alliance and fall out

The international beginning of Ola comes months after the conclusion of its anti-Uber alliance with Didi, Lyft, and Grab. In 2016, Lyft, Didi, Grab, and Ola announced an anti-Uber alliance, as part of which they would help one another, and serve each other’s users in the markets they operate. But the alliance ended last year and the companies have since started to explore one another’s market.

In the coming quarters, Ola plans to enter Sri Lanka, Nepal, and Bangladesh, people familiar with the matter said. Ola raised $1.1 billion last October from Tencent and SoftBank and other investors, and is close to finishing the round with another $1 billion in the coming weeks, people familiar with the matter said.

The landscape of ride-hailing sharing market has increasingly intensified in the recent years, both on the road and behind the curtains. SoftBank, which invests in Ola’s parent company Ant, recently became an investor in Uber. Many analysts and investors are wondering if there will be a consolidation between these companies soon.

Ola has more than 125 million users in India and operates in 110 cities in the country, while Uber operates in under 30 cities.

But analysts say much of the ride-hailing market is still up for grabs. All the companies are increasingly trying to grab as much “land” as they can with profitability not being the top priority. In 2016, during his visit to India, the then chief executive of Uber Travis Kalanick said the company hopes to become profitable in India soon, but as of this month, Uber is anything but profitable in India.

Uber’s current chief executive officer Dara Khosrowshahi said in an interview last year that South Asia remains a very challenging market for the company. He said the company was still in its investment mode in places like India.

China’s Didi, which bought Uber’s local operation in 2016, recent acquired Brazilian ride-hailing company 99. Grab, on the other hand, opened its engineering centre in India. The company says it currently has no immediate plans to enter the Indian market. There could be a new competitor for Ola and Uber in India soon.

First Published: Jan 30, 2018 12:32 IST