- Ola Electric has yet again delayed the delivery of its electric scooters, citing a global shortage of chipsets and electronic parts.
- Varun Dubey, Chief Marketing Officer of Ola Electric Mobility, said that, unlike regular scooters, the Ola S1 and the Ola S1 Pro will only get better with timely over-the-air updates to fine-tune and optimize the software.
- Bhavish Agarwal-led Ola Electric has written to its customers about unavoidable delays in delivery of S1 and S1 Pro electric scooters, reports suggested on Saturday. The delay is on account of a shortage of parts amid a global chip shortage.
Major cab aggregators like Ola and Uber faced a parliamentary panel which asked them whether the recently seen surge in pricing depends on gender, time and battery power left in passenger’s mobile.
The panel also questioned them about Chinese investment and wants more details about data collected and revenue flow in these two companies. The panel has asked for a written reply from Ola and Uber.
https://www.dealstreetasia.com/stories/jpc-quizzes-uber-ola-214405/A Joint Parliamentary Committee (JPC) has quizzed app-based cab hiring services Ola and Uber about the data they collect.
The Parliamentarians questioned Ola and Uber about security and transfer of data. Members of the committe said that these app based services ask for Aadhaar details of clients and pointed out that there were cases in past when data was hacked and the companies were fined.
The JPC questioned the companies about how safe this critical data is in such cases and has asked for a written reply.
Ride-hailing platform and also one of India’s most valued internet company, Ola is now planning to manufacture electric scooters in India.
Ola is now in talks with multiple state governments for 100 acres of land to start off it’s manufacturing plant.
This move will pit the ride-hailing giant against TVS, Bajaj Auto and Hero MotoCorp.
With the Motor Vehicle Bill coming in place, the government will now have the power to regulate Uber and Ola. Many states lack the norms to regulate app-based cab services. This resulted in each state having varied guidelines.
Once the law comes into place, the government will have the power to frame the rules to regulate the cab aggregators such as surge or arbitrary pricing, passenger comfort and safety.
While a Uber spokesperson welcomed the motor vehicle bill by assuring continued support for the government’s vision, Ola is yet to respond to the queries sent in by some sections of the media.
And why we may not skip car ownership just yet.
After I moved back to India, I almost bought a car. But after looking at Gurgaon’s roads, the cost of ownership and the traffic I might have to deal with, I decided against it.
More so because Ola (an India specific Uber competitor backed by Softbank) and Uber were raining discounts and incentives drivers and customers, and there were plenty of cars to be found at the tap of a button.
Will India skip Car ownership entirely and move to transportation as a service?
The more I used Ola and Uber, the more I was convinced that the value and utility that they provide are here to stay. And it made me wonder whether India is perhaps ready to skip car ownership entirely (given that only a small percentage of the population owns cars).
One would think that transportation as a service (and perhaps driverless cars) will quickly become a reality in India, skipping even car ownership much like the mobile adoption happened where a generation of folks skipped the PC entirely.
Unfortunately, I don’t think that this will happen anytime soon.
This despite the fact that car ownership is still really small compared to global numbers and is predicted to be 1.1% less in 2016.
Ola and Uber is still very expensive for a large part of the Indian population, even after discounts.
And with the incentives and discounts fading, both customers and transportation providers are up in arms, especially because public transportation is far more competitively priced (and subsidized by the government).
Let us not also forget unorganized solutions exist in large cities and are able to ferry most passengers point to point for Rs 10–20 at the most.
The consistency of experience is an issue. Uber tries hard to be consistent and Ola tries to be different all the time (much to my dismay introducing many different varieties of the same service). But the accessibility of services on demand, and on time, is a serious problem in India.
The problem of consistency is even more acute with Ola who seems to have new services every single time I log in and driver experiences that are vastly different (for the worse) when compared to Uber.
Old habits die hard. It amazes me how many folks are willing to keep windows open and the dust in, in a city like Gurgaon rather than close it up and switch on the aircon for example, for the sake of saving fuel. Some either go too fast, some are just too slow.
Given the traffic in Indian cities, having a schedule planned, almost certainly never works. Commute times are already notorious and are expected to double within the next 4–5 years.
Drivers cannot find you on their own, and it takes 2–3 phone calls for Ola drivers (to a lesser extent for Uber) to get to find your pickup location and arrive.
The professionalism of drivers is another issue. Many tend to cancel requests that are slightly far out or ask you to cancel if they don’t want to service your location. There’s always a risk of bad behavior by drivers against women, when they travel alone.
The quality of cars is also an issue. In many countries, private car owners ride Uber (or an alternative) to make extra money and the outcome of that is better and well-maintained cars on road.
Ola and Uber drivers are taxi owners who have recently bought cars or work for someone else who owns taxis. Cars are not always well maintained, are may not be the safest on road.
Unionized taxis are a big problem as well because they can bring the entire economy to a halt when they feel that the fares are not enough. This is actually happening as we speak for the same reasons and both Ola and Uber are being held to a ransom due to a strike leaving customers high and dry.
Payments are a pain (no I don’t want to transfer to a wallet from a bank wallet) and it is absurd to enter a secondary pin just because the backend systems are not secure enough to handle fraud.
Somehow India is unhealthily obsessed with mobile wallets which don’t seem to provide any real value except for removing the two-factor authentication.
Lastly, the pride of ownership is huge in India. It will be a while before cars are treated as a commodity.
What will it take to skip car ownership?
IMO, skipping car ownership will require transportation platforms to provide enough value, at extremely competitive costs together with a fair amount of personalization that replaces the experience of owning a car.
Autonomous vehicles may be able to remove the human (and inconsistent) aspect of transportation services but in an economy where there’s plenty of labor available and voter appeasing governments, I don’t really see that taking off in India at scale within the next decade.
As a matter of fact, I have been exploring buying a car to avoid the uncertainty and delays caused due to the dependency on these transportation providers.
In Conclusion, I think that Ola and Uber might continue to exist and might become much larger players. But I do not see them making a very significant dent or creating a habit that makes people skip thinking about car ownership entirely within the next couple of years.
As with most of my blogs, I will keep correcting content if I find errors.
Hypothesis# 1: – Cab aggregators are not working towards answering the most important question of this industry
“Which side of the cab equation (drivers and consumers) should they subsidize and for how long?”
Neither Ola nor Uber is satisfying unit economics; but just burning cash to incentive either side of the equation.
In a market like India, where there is a need of on-demand, cost-effective, safe and reliable transportation, the real question becomes, which of the two business models: asset-heavy or asset-light will survive in the long run?
However, careful study of both models brings us to our next hypothesis.
Hypothesis #2: – Neither asset-light model (Uber/Ola) or asset-heavy model (Meru) will survive in the long run.
In association with IIM Bangalore, we did a focus group study with consumers who avail cab services in Bangalore, Faridabad, New Delhi, Gwalior, Mysore, Indore and Coimbatore.
This discussion was around following questions:
Question 1: – What are you expecting from an app based cab service?
Majority of the responses were around reliability, on-demand availability, affordability and safety.
Question 2: – What are your concerns regarding app based cab service?
Majority of the responses were around safety and reliability.
Looking closely at major cab providers in asset-light model, we concluded that while Ola is pro drivers, Uber is pro consumers. Hence, more drivers are turning to Ola and more consumers are turning to Uber; disrupting the entire equation of this industry.
Moreover, these asset-light cab providers can’t guarantee safety, as they don’t have tight control over drivers.
Now if we look closely at major cab providers in asset-heavy model, we conclude that though they have better control on safety aspect, they are unable to deliver on availability.
But, wait, is there a middle way? Can we use a hybrid model, which can give us the best from both the worlds?
Our research at IIM Bangalore led us to the following hybrid business model:
Asset – Medium Model: This allows cab providers to remain asset light, by not owning cab fleet but still ripping the benefits of asset-heavy by partnering with small cab operators. They can do so by coordinating and knowledge sharing with their partners. However, it is important to note that individual drivers can’t be coined as partners.
This smart-control approach involves six management techniques.
- Embedding or collocating people in partner organizations.
- Duplicating some partner activities.
- Controlling inputs.
- Controlling outputs
- Controlling Systems.
- Establishing true win-win relationships with critical partners.
Above smart-control techniques will allow companies to achieve benefits of asset ownership without the capital commitment.
Mantra is : Survival of the fittest
Stay tuned for detailed research work on this model: Asset – Medium Model
PS: Special thanks to co-author of this article, IIM Bangalore colleague, and my wife – Kritika Sharva.
Adds NextBigWhat team : A related piece: Ola Play : Does it make sense?
Ola is raising its next round of funding $600mn+ and the company now wants its ‘foreign funded’ competitors, a.k.a Uber to stop predatory pricing.
The company wants government to stop ‘capital dumping’ by Uber.
“There is an urgent need for adequate regulation to curb predatory pricing and capital dumping in the ecosystem in the interest of co-existence of all players in the ecosystem.”
“foreign capital should not be used only to offer disruptive pricing” – Ola’s Chief Operating Officer Pranay Jivrajka (source)
Well, Ola itself has raised funding from DST, Didi, Softbank (i.e. the foreign investors) and ‘predatory pricing’ has been the mantra for all players, asking government to step in and play the ‘India’ card is an old tactics for Ola.
Also : Uber sued Ola For $7.5mn (6 months back).
Of course, Uber is 10-20% cheaper than Ola – but more than the price, Uber does offer better quality of service.
What’s your take?
2 Ola Cab Drivers allegedly raped a 12-Year-Old girl and threw her body off the Kolkata bridge.
The victim lived on a pavement with her mother in central Kolkata, and was forced into the cab by the two drivers.
A statement from Ola said, “We are saddened by the reports of the alleged misbehaviour of a driver in Kolkata. On preliminary identification of the cab details shared by authorities, we have suspended the account associated with this cab with immediate effect. As per our records, this incident has not occurred while on the Ola platform. We will work with the authorities to share any information that will help support their investigation.”
To be fair to Ola – this case isn’t really about Ola.
The Motor Vehicles Act clearly says that they have to go by the taxi meter. The government has formed a committee under Roads Secretary Sanjay Mitra to draw up guidelines for taxi aggregators. Auto and taxi operators in the Capital went on a three-day strike opposing Ola and Uber operations.
We had earlier reported that Ola drivers held protests outside the company’s Chennai office. The drivers protested saying that Ola has set a high-performance bar which makes it tougher for incentives and several other issues.
Right after this, both Ola and Uber have relaxed few regulations and made it easy for its drivers to hit the performance targets, reports ET.
Earlier,the Ola drivers had to take nine rides during the peak hours to receive incentives but now the firm has increased the slot for peak hours, so the drivers will now get more time to complete the specific number of rides based on the various car categories and the demand. Implementing a different strategy, competitor Uber has done away with peak-hour conditions which allows the Chennai drivers to complete the number of rides during any time of the day.
Both the companies’ drivers need to complete 15 rides in a day so as to achieve their incentives. But the set of targets varies from one city to another and also on parameters like car types and how long has the driver been working with the company.
Ola drivers have confirmed the regulations to ET but also asserted that more needs to be done to build a sustainable partnership.
Close to 100 Ola drivers have gathered at the company’s Chennai office protesting on several issues, reports ET.
According to the drivers, Ola has set a high performance bar which makes it tougher for incentives. Also, Ola Micro which is the cheapest ride being offered by Ola [ Rs 6/km] does not pay enough to the drivers.
The drivers have also protested citing that the company forces drivers to take nine rides during the peak hours in a day and no incentive is provided if the drivers fail to do so.
The Ola drivers also wants to remove the hurdle of customer feedback and the star rating, which also decides on their incentive. The Bangalore-based company has asked for 10 days to resolve the issue.
The High Court in Delhi has asked Delhi government to file a reply on steps taken by Govt to stop Ola & Uber from charging fares arbitrarily during the odd-even phase.
The Aam Admi Party-led Delhi government has said that it will take stern actions against Uber and Ola for causing hardship to commuters and charging exorbitant prices during the ongoing odd-even scheme in the state.
“The government is serious about preventing arbitrariness by app-based taxi services and is ready to take strict action against them, Ola and Uber will have to follow rules. If we receive complaints against the arbitrariness of any app-based taxi service, we will impound their vehicles,” said Gopal Rai, Delhi Transport Minister.
Delhi High Court is likely to hear the matter on April 25.
Commuters can register complaints against arbitrary fares at 011-42400400!
Price surging by taxi-aggregators has raised alarms in several states. Karnataka government had recently issued notices to aggregators and had even impounded several vehicles in the state. Maharashtra too adopted the similar policy.
Bhavish Agarwal, the founder of Ola Cabs, has taken to twitter to state that Friday’s reports of alleged ola-uber deal as mentioned in DNA, was incorrect and an attempt by Uber to malign their image.
“We’re here for the long run, committed to building mobility for billion Indians. Planted malicious stories are a sign of others desperation!,” Bhavish said in his tweet.
We’re here for the long run, committed to building mobility for billion Indians. Planted malicious stories are sign of others desperation!
— Bhavish Aggarwal (@bhash) April 15, 2016
On Friday, DNA had reported that Ola cabs were in talks with Uber to sell its stake in the company.
However, Ola later denied any intent of business with their rival Uber in India and initiated a legal action against DNA for reporting a false story.
“We have seen Uber in India reacting to Ola’s growth with moves not seen elsewhere globally – be it front page advertising, dramatic fare cuts and rapid and knee-jerk changes in categories – so one can only surmise that they are worried about their market share declining. We are clearly on the winning horse with Ola and have no doubts about its future, ” said Avnish Bajaj, MD of Nexus Partners, Key investor in Ola Cabs.
“We are shocked and dismayed at the lack of journalistic ethics in carrying the story, despite our repeated denial to the reporter and the publication’s editorial representatives. We also had received a verbal confirmation that the report shall not be carried given the company’s denial,” said Ola in a statement.
Earlier today, DNA reported that Uber is allegedly close to acquiring a controlling stake in rival Ola. However, Ola has denied the speculation while Uber declined to comment.
Ola’s statement further added, “We will initiate appropriate legal action and seek redressal and compensation for the damage caused to us by this irresponsible reporting from DNA.”
ANI technologies, promoters of Ola cabs have categorically denied any intention to sell its stake to Uber.
“We would like to state that the article, attributed to an ‘unnamed source’ is completely false, misleading, malicious and planted in the said newspaper with the intent of causing harm to the Ola brand and creating confusion among our stakeholders,” ANI Technologies commented in its statement.
When contacted, Uber refused to give any comments. Reportedly, Uber is aiming to acquire a controlling stake in Ola. Uber will then be likely to get around 74% share, leaving only 26% to SoftBank. This deal will also make Bhavesh Aggarwal and Ankit Bhati exit the company.
Ola cabs in India has around 40-45% market share, making it a bigger player in India than Uber which has only 20-25% share.
How Would They Stack Up?
Outside of India, Ola had announced a strategic partnership with many aggregators to take on Uber. So, in most probable calculations, it would be surprising to see Ola selling stakes to Uber. In a classic case of chickens coming home to roost, Uber had sued rival Ola in March, alleging that Ola created 90,000 fake Uber accounts using falsified phone numbers.
At the outset of it, with rivalry intensifying between the two, it is worth keeping a tab on the speculations around the two cab aggregation giants in India.