CAB AGGREGATORS IN INDIA: A

CASE STUDY OF OLA

 Case Study
Over the past few years, there has been an unprecedented growth in the Indian
taxi industry. The demand for taxis in India is on the rise owing to the hassle
free travelling experience offered to the passengers. Taxi is giving a stiff
competition to both public transit and private car in the current times. India
currently is witnessing a revolution in Indian taxi market. There is a downward
trend in the usage of traditional taxis by the customers. With the growing
smartphone penetration and active internet users, there is a surging demand for
app based taxis. The objective of this paper is to gain insights about the present
scenario of taxi industry in India and to compare desi and videsi taxi rivals i.e.
Ola and .
1. INTRODUCTION
A major chunk of the population these days prefer residing in the urban areas owing to
the wide range of facilities available there i.e. good job prospects, better educational
infrastructure or easy accessibility to everything. There is a continuous migration of
the residents from rural to semi-urban and urban areas. According to United Nations
Population Fund (UNFPA), world population living in urban areas would reach
around 5 billion by 2030 and this urbanization would occur majorly in Asia and
Africa. Day by day, the mobility requirements of the people are changing. There are
numerous modes of transportation available that support the consumers‟ mobility such
as trains, buses, metros in metropolitan areas. However, longer travel time taken and
the non-flexibility of these modes have reduced the demand for the same among the
people and the taxis offering the desired flexibility, comfort level and privacy are
considered more convenient by the consumers (Salanovaet al., 2011). Taxi industry,
by providing employment opportunities to a large number of people and by providing
access to convenient transportation modes, aids in boosting the urban transportation
systems, in economic and mobility terms respectively (Poóet al., 2018). Dynamic
lifestyle of the consumers coupled with the rising disposable income is mainly
attributing to the growth of taxi services in India. Consumers are getting attracted
towards the taxi market due to the hassle free experience provided during travelling as
well as other offerings like various payment options, convenience in app based
bookings, GPS enabled taxis, proficient drivers etc (Business Wire, 2017). Taxi
industry in India is worth approximately ₹ 48000 crores and is expected to grow
expeditiously in future (Panigrahiet al., 2018). Within the taxi market segment, there
is a burgeoning demand for the online cabs, especially in metropolitan areas and tier I
cities which can be asserted from the very fact that monthly taxi rides surged by 30
percent in a year i.e. from 50 million in july, 2017 to 65 million in july, 2018(Redseer,
2018). In 2018, ridesharing from the app based sources and online modes resulted in
revenue amounting to US$371mn (Statista, 2018). By FY 2020, the sale of taxis is
expected to contribute around 15-17 percent of passenger vehicle volume in India
(The Economic Times, 2017).

2. Background Information Of The Company

Ola is India’s largest mobility platform and one of the world’s largest ride-hailing companies,
serving 250+ cities across India, Australia, New Zealand, and the UK. The Ola app offers
mobility solutions by connecting customers to drivers and a wide range of vehicles across bikes,
auto-rickshaws, metered taxis, and cabs, enabling convenience and transparency for hundreds of
millions of consumers and over 1.5 million driver-partners. Ola core mobility offering in India is
supplemented by its electric-vehicle arm, Ola Electric; India’s largest fleet management
business, Ola Fleet Technologies and Ola Skilling, that aims to enable millions of livelihood
opportunities for India's youth. With its acquisition of Ridlr, India’s leading public transportation
app and investment in Vogo, a dockless scooter sharing solution, Ola is looking to build mobility
for the next billion Indians. Ola also extends its consumer offerings like micro-insurance and
credit led payments through Ola Financial Services and a range of owned food brands through
India’s largest network of kitchens under its Food business.
4.EVOLUTION OF THE TAXI INDUSTRY
Indian taxi industry is fragmented and unorganized to a great extent. The taxi market
in India is divided into two markets i.e. the unorganized market and the organized
market. Individual car owner and agencies operating in a single or very few cities
make up the unorganized sector. The organized sector, on the other hand, consists of
the owners, affliators and aggregators (Redseer Consulting, 2014). The taxi began
operating in India in the name of kaalipeeli taxis in Mumbai in 1911. These taxis
functioned in the conventional manner where the customers would be required either
to wait for the taxis on the streets or to go to the taxi stands in order to hire a taxi
(Bhallaet al., 2018). The taxi industry has been witnessing a sea of change from the
traditional taxi services to the radio cabs to the cab aggregator services. Until 2003,
the Indian taxi market was largely unorganized. Customers, at that time, were having
access to either prepaid taxis running under the control of state governments or the
private operators, both providing inferior quality services at a high cost
(Venkatesh&Easaw, 2015). Thereafter, radio cabs came into light with the
introduction of Mega cabs in 2001. Radio taxi is a “taxi that operates through radio
signals”. Upon receiving the call from the customer, the operator interacts with the
driver through the radio signals for locating the nearby cabs (Khupse, 2017, p. 474).
Radio cabs work under the fleet ownership model whereby the companies have full
ownership of the cabs they are operating (Joshi & Mehta, 2015).Then, the country
witnessed the coming of affliators in the market. Affliators such as savaari,
taxiguide.in are connected with various car rental agencies and provide numerous
deals and packages (Redseer Consulting, 2014). Followed by the affliators,
aggregators entered the Indian taxi industry. Aggregator is defined as “a person, who
owns and manages a Web-based software application, and by means of the application
and a communication device, enables a potential customer to connect with persons
providing service of a particular kind under the the brand name or trade name of the
aggregator” (Panigrahiet al., 2018, p. 31). App based cabs is relatively a new
phenomenon which will exert a favourable effect on the urban transportation in the
coming years (Harding et al., 2016).
5. OLA
In India, consumers today, want everything at just a click away with minimal effort on
their part. The consumers are getting used to of ordering each and everything through
the mobile apps. Owing to the consideration of this very fact by Ola and resulted in
huge success for both the aggregators. Increase in the usage of smartphones on one
hand and decrease in the data tariff rates with the advent of Jio on the other has led to
a surge in online activities that consumers indulge in (Redseer, 2018). Both Ola and
target these tech savvy customers in order to increase their own market share.

Along with this, the level of reliability and absence of friction in the process of ride
request contribute equally towards the ongoing success of the cab aggregators
(Banerjee &Johari, 2019). Following China and North America, India emanated out as
the third biggest cab aggregator market in 2016 thanks to the growing internet users in
the country. (Muralidhar, 2016). Ola , a trade name for ANI Technologies Pvt Ltd, is
the discovery of AnkitBhati and BhavishAggarwal, both being the alumni of Indian
Institute of Technology, Bombay. Ola, marked its inception way back in 2010 in
Bombay and later on shifted its headquarters to Bengaluru (WHIZSKY, 2017). The
company, being the first in India to offer windows, android and iPhone application,
assisted in tracking out the cab, apart from offering the convenience in cab booking
(Tripathi&Leepsa, 2017). Ola was the first to provide the cab aggregation services in
India in 2010, thereby enjoying the first mover‟s advantage (Business World, 2016).
Technologies Inc, a US based transport networking company, was found by Travis
Kalanick and Garrett Camp in 2009. entered the Indian territories in 2013(Kumar
&Sentamilselvan, 2018). Followed by United States, India happens to be the largest
market for (Surie&Koduganti, 2017). For strengthening the position in market, Ola is
in continuous process of companies‟ acquisitions. In March 2015, Ola took over Taxi
For Sure for $200 million. With the motive of strengthening own mobile wallet app,
ola acquired a mobile payment start-up company called Qarth in 2016
(Tripathy&Leepsa, 2017).In the era of Startups, Ola is amplifying the
Indianeconomy‟s growth by around 2-4 percent. And global leaders in the aggregator
industry like are learning the ways of expansion and creation of larger customer base
with minimum amount of investment (Gulati, 2019).

7. Business Model
Source: Adapted from paper titled “Measuring the Performance of Taxi Aggregator
Service Supply Chain”, SAMVAD:SIBM Pune Research Journal.

The process of cab booking with both the aggregators is basically the same, the only
difference lies in the add on values provided to the users. Customers have the access
to pre-booking option in ola, which is not the case with , where booking is done on
availability basis (Sarvepalli&Prakash, 2016). Cab booking in ola and involves usage
of the smartphone application by the passengers for seeking a ride, after which
passenger‟s location is sent to the drivers in proximity. When the request is being
accepted by the driver, the customer can have a look at the cab‟s real-time location
and how much time the cab would take to arrive (Rayleet al., 2016) These
transportation networking companies are earning revenue by means of pay for
performance model (Uthira, 2018). The drivers here follow the principle that the more
the drivers indulge in the work, the more the pay as a result and greater would be the
incentives (Kashyap& Bhatia, 2018).

13. Services Offered

For the purpose of commuting within the city, Ola offers numerous fleet variants such
as ola bike, ola cabs in micro, mini, prime sedan, prime suv and luxury types and ola
share with the motive of satisfying different kind of customers. Besides providing in
city services, ola also offer outstation and rental services. Ola introduced another
variant, ola auto, few years back in October, 2014. Diversifying itself, ola entered the
food delivery segment with Ola Cafe app, wherein the buyer makes the order through
the app and delivery is made by ola cabs swiftly (Business Today, 2015). Similarly,
services vary from X, XL, Pop, Black, SUV to pool. In addition to the ridehailing
services, also give courier delivery facilities through Rush and food delivery services
via Eats (Basu, 2017). as well as ola treats the safety of customers on a priority basis
and therefore came out with an in- app „SOS‟ button (Business Today, 2015).

5. Findings
1. Global Market Presence:

Ola has established a significant global presence, operating in numerous countries and cities,
making it one of the most recognizable names in the ride-sharing and transportation industry.

2. Technological Innovation:

Ola is at the forefront of technological innovation in the transportation sector, leveraging

artificial intelligence, machine learning, and data analytics to enhance its platform's
efficiency and user experience.

3. Diverse Service Offerings:

Beyond ride-sharing, Ola has successfully diversified its services, including food delivery
through Ola Eats and exploring opportunities in freight and autonomous vehicles.

4. Challenges with Regulation:

Ola has faced regulatory challenges in various markets, with authorities grappling to define
and regulate the sharing economy. The company has had to adapt its operations to comply
with local regulations.

5. Economic and Employment Impact:

Ola has had a significant impact on employment patterns, creating opportunities for
individuals to work as independent contractors. However, this has also sparked discussions
about labor rights and the gig economy.

6. Financial Performance:
Ola's financial performance has been a topic of interest, especially its journey to profitability.
The company has experienced fluctuations in revenue and faced challenges in achieving
sustained profitability.

7. Investment in Autonomous Vehicles:

Ola has been investing in autonomous vehicle technology as part of its long-term strategy.
The development and integration of autonomous vehicles could potentially reshape the future
of the ride-sharing industry.

8. COVID-19 Impact:

The COVID-19 pandemic has significantly affected Ola's operations, with a decline in ride-
sharing demand, but an increase in demand for food delivery services as people adapted to
new stay-at-home norms.

4. Analysis
 Business Model Canvas (BMC)
 Customer Segments: Uber's target market and user base.
 Value Proposition: What Uber offers to both riders and drivers.
 Channels: How Uber reaches its customers and drivers.
 Customer Relationships: The nature of interactions with users and drivers.
 Revenue Streams: Breakdown of Uber's sources of income.
 Key Resources: The assets and capabilities crucial for Uber.
 Key Activities: The essential operations for Uber's success.
 Key Partnerships: Collaborations and partnerships that enhance Uber's
business.
 Cost Structure: Uber's major cost components.

14. CONCLUSION

Ola has seen a tremendous growth in the taxi market sector.

There is surely no looking back for Ola as it is improving day
by day in every prospect. Revenue of Ola has increased almost
10 folds over the past four years. Today, it is the largest cab
service provider in the country. Ola has successfully achieved
public support and has created a buzz about its brand in the
market. Furthermore if some more technological advancement
is done at Ola then the customer base can be increased by
providing better experience to the customer. Ola now has
shifted its focus on target markets and is focused on providing
desired service to the people in the target market. The
economic segregation depending upon the income group and
requirement of the people is well appreciated. On one hand Ola
promotes its brand by traditional methods and on the other
hand it also uses the modern techniques of promotion. At the
same time it does not forget to highlight its name in social
safety, creating social awareness and promoting acts of
humanity. The key element in making Ola a successful brand is
the efficient and quick accessibility which is offered by the
firm. The firm not only improves through its intense
promotional activities but also due to the services and comfort
offered to users and employees. Ola is making you sluggish. A
single tick gets you a taxicab.
Habits are less demanding to develop when the change
required in conduct is minor. What's more, once a habit is
shaped, it's difficult to backtrack.
So OLA has been and will be a great technology platform for
transportation and offering flexible options of booking and
payment to customers and flexible timings and facilities to
drivers. And shortly, we are going to experience a big boom
and great facility of getting our grocery delivered to us with
ease. Kudos to the idea of the founders and something more to
make us proud is that it has been started in India by two
genius Indians.

5. Recommendation

1. Diversification of Services:
Explore opportunities to diversify service offerings beyond
ride-sharing. This couldinclude expanding into areas like food
delivery, freight, or autonomous vehicles.

2. Global Expansion Strategy:

Develop a strategic plan for entering and expanding in
emerging markets, considering local regulations, cultural
nuances, and competition dynamics.

3. Investment in Technology:
Continue to invest in cutting-edge technology, including AI,
machine learning, and data analytics, to enhance user
experience, optimize operations, and stay competitive in the
evolving transportation landscape.

4. Partnerships and Collaborations:

Foster strategic partnerships with local businesses, public
transportation systems, and other stakeholders to create a
more integrated and comprehensive mobility ecosystem.

5. Environmental Sustainability:
Prioritize and promote environmentally sustainable practices,
such as investing in electric and hybrid vehicles, to align with
growing consumer concerns about climate change.

5. Suggestion

Uber can implement an advanced and comprehensive driver

training program to ensure a higher standard of service and
safety. This program could include:

1. Customer Service Training:

• Equip drivers with excellent customer service skills to
enhance the overall rider experience.

2. Safety Protocols:
• Provide in-depth safety training, covering defensive driving
techniques, handling emergencies, and adhering to traffic
rules.

3. Cultural Sensitivity Training:

• Offer training on cultural sensitivity and diversity to ensure
drivers can provide a welcoming environment for riders from
diverse backgrounds.

4. Technology Utilization:
• Educate drivers on utilizing the full potential of the Uber app,
including navigation features, communication tools, and
troubleshooting common issues.

5. Professional Development:
• Implement ongoing professional development opportunities
for drivers, such as workshops on improving ratings, managing
stress, and financial planning.

This suggestion aims to improve the overall quality of the Uber

service by investing in the skills and professionalism of its
drivers. If you have a specific area in mind or want more
suggestions, feel free to let me know!

Summary
o Ola Cabs has the highest share of voice at 46%
o The negative sentiment among customers is high for Meru
and Easy Cabs
o Ola has the largest fan base on Facebook. This may be
due to its international presence. Fan size of Ola is 170
times that of Easy Cabs
o Ola is the most followed radio taxi service provider on
Twitter
o Males are more likely to talk about cabs than female
o Youths tend to talk more about taxi services as compared
to elder age group.
o 80% of the buzz around Radio taxi service providers is on
Twitter
o Ola and Ola have city specific Twitter handles
o Ola and Meru have dedicated support handles on Twitter -
@support_ola and @meru_cares
o Meru Cabs has a hate-handle on Twitter