With a war chest of $210-million investment from Japan-based SoftBank Corp, online cab aggregator Ola (earlier known as Olacabs) has made aggressive plans to spread its wings across the country. Present now in 22 cities, the company plans to extend its network across 40 cities by the end of current fiscal and to 100 cities over the next year.
What it is proud about is the ease of booking online through its mobile app with customers getting real time vehicle details, the driver’s name, etc, while the drivers could find the pick-up spot on a map through their handset.
Ola’s latest entry is into Coimbatore where there are already well entrenched players.
In an interview to
How do you intend to utilise the $210 million investment from SoftBank?
SoftBank as an investor and strategic partner brings in a lot of relevant experience and knowledge. We will continue to build towards our vision of making transportation a seamless and ubiquitous service and focus on the driver ecosystem to enable micro-entrepreneurship and skill development at scale. Earlier this year, we had announced that we would be allocating ₹100 crore to nurture micro-entrepreneurship among drivers.
The focus area of this investment would be expansion across cities and categories, as well as technology – for drivers, customers and creation of a supplier ecosystem – enabling driver entrepreneurship.
What is the total investment by other domestic/overseas investors? Are you looking for fresh investment?
We received our first round of funding (Series A) from Tiger Global in 2012, Series B from Matrix Partners and Tiger Global in 2013, Series C of ₹250 crore led by Steadview Capital and Sequoia Capital in 2014 and finally Series D of $210 million led by SoftBank Corp in October 2014.
You are now present in 22 cities. What is the expansion plan?
We are expanding at a rate of 5-7 cities per month and will continue this pace through the current financial year. Our plan is to be present across 100 cities by the end of FY 2016.
How many cab operators have tied up with you and what is the total fleet size? In Coimbatore, how many operators/vehicles will be present with you?
We have over 40,000 cabs across 22 cities. We will see this go up to 1,00,000 cabs by the end of the current FY (2015). We have over 200 cabs signed up in Coimbatore and plan to increase to 600 within the next six months in this city.
Is the Indian cab market large enough to take on so many aggregators?
The taxi industry in India is upward of $8 billion in market size. What sets India apart is also the lack of organized personal transportation options in most cities. The low car ownership and high cost, and rapid growth of tier 2 & 3 cities all offer a huge opportunity for personal transportation.
What is the payment mechanism that you would adopt in smaller cities like Coimbatore where cash would be preferred mode of payment?
Our customers can make cash payment and pay through Ola money. We have a wallet system where customers can recharge their account and use the money for making payments after each ride.
Do you plan to enter Kerala?
We are aggressively expanding, from just five cities in the beginning of this year we have reached 22 cities. Kerala is definitely an important market and we will be launching there soon.