Olacabs Story : A Good Ride So Far [Interview]

Talk to some folks and you can see their passion for an idea, or a belief, or cause very apparently. Bhavish Aggarwal of #olacabs is surely one of them. Pluggd.in…

Talk to some folks and you can see their passion for an idea, or a belief, or cause very apparently. Bhavish Aggarwal of is surely one of them.

Pluggd.in has followed the Olacab story through its growth – and we have a lot of respect for folks who not only try and create real businesses with real revenues, but also try and make a difference to the space they’re working in.

We caught up with Bhavish again, and of course, started with a congratulatory note for the recent round of funding. We then went on to discuss their story in more detail. Here’s what we gathered (paraphrased, summarized and edited for readability):

What has Olacabs been doing ?

Olacabs set out to change the taxi industry, not merely aggregate it. And we have been focused on that over the last year. At the backend, we now have a very tight selection process for cabs we approve – our approval rate is 3 to 4 for every 10 cabs we come across. We’ve added about 700 cabs so far over 300 operators. We have also initiated an in house training for the drivers, and ensured a good, polite service for our customers. Given that we’re aggregating a large number of cabs, we’re trying to bring benefits arising from economies of scale, better negotiating power and the network effect to the cab operators as well. A combination of all these have helped create a happier ecosystem both on the supply side as well at the customer end.

We have also used technology from the word go both for the customer interface, as well as at the backend. We are looking at integrating operators into this as well so that they not only work better with us , but can improve their operations and costs.

Are customers using technology ?

Olacabs Cofounders
Olacabs Cofounders

Most still call. But a growing number books through the site, and through the (html5) web app. The last helps us track demand in almost real time, and optimize our fleet distribution geographically. We’re now internally shooting for a cab getting to the customer within 15 minutes of a call. (Pluggd: That’s a real pain point – and once solved, will be very cool!)

How’re the numbers looking ?

Good! We’re doing about 300 bookings a day already (Pluggd: we guesstimate their annualized revenue to be in the 4-5Cr ballpark though there is no official confirmation). We’ve started operations in Delhi as well but thats in its early days. We have a 75-25 split in Mumbai between intra city and outstation bookings, but that may change across cities. Our return rate for customers is very very high. So are referrals.

Given that customers are willing to pay for good, reliable service, we have been able to charge a small premium over the market rates, and at the same time offer better utilization to the cab operators. Our margins are healthy at 15-25%. Of course, this may change as we scale and grow across cities and segments. For now, the model and our approach has been a win-win.

Now that you’re funded, what’s next? How’s the money being spent?

Scaling the business across 10 cities is the next priority. We have a lot of growth left in Mumbai itself, and overall, hope to grow to 20x in a year or two.

The team is at 100+ now – we have a strong engineering team from the best colleges, in house teams for approvals and audits, training and a dedicated call center. We need to hire a core team across cities that brings in local knowledge, and runs operations efficiently.

Our customer acquisition thus far has been through word of mouth, so obviously we have had very low costs for the same thus far. There will be some marketing and brand building as we reach out to a wider audience, of course.

And what are your challenges as you grow?

The biggest is that each city is a different geography, a different market with differing needs and we will need to put in place a core team that can help us understand these over a couple of months as we ramp up. We’re pretty confident that we have a very good reputation, and value proposition for cab operators, so the supply side should be easier to manage.

There are established competitors at the local level as well. Right now we’re too small for the radio taxi operators, and operating at a different price point from the corporate cab service players. We believe the technology, service levels will differentiate us from the smaller aggregators and operators. We also intend to foray into serving corporates on a prepaid model.

What’s the bigger picture?

We are not an in-your-face brand, but are ensuring service attributes that we’d like getting linked with Olacabs. More and more cabs are increasingly carrying the brand and we would like to be the preferred cab customers choose across all tier I and II cities in a few years.

At the same time, given that we’re helping organize a semi-organized sector, we would like to bring increased added benefits to cab operators. We believe this makes us different and gives us an edge over the competition.

Funding news?

Our lips are sealed 🙂


Pluggd : We wish Olacabs the best. Its a tough market, and they’ve done the right things to stand out and be relevant across the food chain. Scaling across multiple cities all at once is likely to take a lot more than just money. There are many other similar services – and some bigger (TaxiGuide.in operates in 75 cities already!), and its a wide open game, but we think Olacabs can pull it off.

On funding – lets just say we think its likely to be closer to the numbers reported later than earlier. The valuation (again, a lot of guesswork there) does seem to be on the high side for a business that’s rooted in brick and mortar, and has a new setup challenge in every city it enters. This may be so because its a wide open market, there are many strong service and technology differentiators over regular aggregators, and the low capex needs give it an edge and scalability over traditional taxi services.

Sign Up for NextBigWhat Newsletter