Ola is a lucky startup. Its rival, Uber, the world’s most-valued privately held company, is in a crisis.
Uber CEO Travis Kalanick has been battling a series of allegations — from stealing autonomous car secrets to deceiving authorities, rise of the bro-culture to overlooking sexual harassment instances, and most recently, obtaining the medical records of a woman who was raped by an Uber driver.
On Tuesday Kalanick announced an “indefinite leave of absence” from the company, to grieve his mother’s untimely death in an accident. There has been a series of top-level exits at Uber, including Eric Alexander, president of Uber’s Asia Pacific business, who was deeply involved in the India business.
While 2017 has been a tough year for Uber, Ola has made the most of it — from launching electric cars as taxis, raising three more rounds of funding, starting operations in eight more cities, to adding about a lakh more drivers
While 2017 has been a tough year for Uber, Ola has made the most of it — from launching electric cars as taxis, raising three more rounds of funding, starting operations in eight more cities, to adding about a lakh more drivers.
The two cab-hailing companies have been locked in a no-holds barred, high-pitched battle for the Indian market since 2014, which has led to heavy spending for Ola, increasing its losses.
“By having Kalanick pushed out, the board can get a new management in place and become relevant again. I don’t think the battle is over yet,” said Arvind Singhal, chairman of Technopak, a Delhi-based consultancy firm. “Ola, meanwhile, is taking advantage of this like Lyft has.”
“Uber has given Ola an opportunity to actually rip it and Ola has taken the opportunity,” said brand expert Harish Bijoor of Harish Bijoor Consults. “There is PR and there is counter PR. Ola is using the second thing to show that it is a more sensitive company.”
“Uber has given Ola an opportunity to actually rip it and Ola has taken the opportunity… There is PR and there is counter PR. Ola is using the second thing to show that it is a more sensitive company” — Harish Bijoor, brand expert
India is Uber’s second largest market by number of rides, and Ola has left no stone unturned to cash in on Uber’s every crisis.
In 2014, they were in a public spat over a case of rape of a woman by an Uber driver in New Delhi. Uber reportedly doubted the woman’s report and suspected the incident was a sabotage attempt orchestrated by Ola.
Ola reacted sharply to the claim. In a statement, it said Uber’s handling of the case was “despicable” and it was “shameful” of Uber to think Ola had sabotaged the case.
Meanwhile, last year, Uber stitched a partnership with the government, stoking a nationalism debate. It launched UberPITCH in collaboration with ministry of commerce and industries to identify entrepreneurs and help them connect with investors.
In 2014, they were in a public spat over a case of rape of a woman by an Uber driver in New Delhi. Uber reportedly doubted the woman’s report and suspected the incident was a sabotage attempt orchestrated by Ola
On June 30, 2016, Pranay Jivrajka, Ola’s first full-time employee, now a founding partner of the company, wrote in a blog, “It is a shame that our competition (Uber) has to fan a debate of nationalism to hide their identity of being a multinational, with serial violations of law as a business strategy, not just in India, but globally.
Jivrajka wrote that Uber continued to use white number plates for its bike taxis and cars in Gurugram, the satellite corporate hub on the Southwest of Delhi, despite seizures of many vehicles by the local authorities.
Later, Ola itself jumped into the nationalism debate. On December 7, 2016, Bhavish Aggarwal, founder and CEO of Ola, along with Sachin Bansal, cofounder and executive chairman of Flipkart, said that international companies were destroying domestic businesses.
This was also the time when the government was actively looking at regulating the cab-hailing business in India — by curbing surge pricing, and even thinking of installing tariff metres inside cabs. “China rightly identified consumer internet as important and moved to protect it, and we need to do the same in India,” Aggarwal had said at Carnegie India’s Global Technology Summit in Bengaluru.
Kalanick reacted. A couple of weeks later, on his trip to India, in a chat with Amitabh Kant, CEO of the National Institute of Transforming India (NITI Ayog), he said he would apply for an Indian citizenship, if that helps in resolving nationalism debate.
In an off-the-record meeting with this reporter in early March, a senior Ola executive had said Uber has continued with capital dumping in India. “That has negatively impacted the market… They have not followed the law of the land and the business at these price points are not sustainable,” he had said.
The curious play of Uber Vs Ola is not limited to India. In the US, Lyft has taken full advantage of Uber’s loss — in areas of building new partnerships with carmakers and also in the field of driverless cars.
“Ola launched rides for Rs 50, Uber followed with rides at Rs 49. Ola tied up with the Indian Railways, Uber copied it. We started talks for an association with Apollo Hospitals, Uber announced a quick partnerships” — a source at Ola
In India, too, Ola has partnerships with Mahindra and Maruti. It is also in talks Toyota for electric cars. Another source said that Ola has always led the market in India when it comes to shared mobility.
He gives some instances. “Ola launched rides for Rs 50, Uber followed with rides at Rs 49. Ola tied up with the Indian Railways, Uber copied it. We started talks for an association with Apollo Hospitals, Uber announced a quick partnerships,” the source said.
FactorDaily reported recently that Uber has copied Ola Pay, the in-car infotainment system, which allows customers to watch movies, serials, and listen to music. “Ola is still thinking a little bit more Indian than Uber, which has a global legacy. Ola can be more adaptive, while global companies will have to go back to their parent to take any decision,” said Singhal.
However, the challenge for Ola will be to keep that focus and pace of adding features that matter to the Indian riders. Uber with it financial strength can make a comeback soon.
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Disclosure: FactorDaily is owned by SourceCode Media, which counts Accel Partners, Blume Ventures and Vijay Shekhar Sharma among its investors. Accel Partners is an early investor in Flipkart. Vijay Shekhar Sharma is the founder of Paytm. None of FactorDaily’s investors have any influence on its reporting about India’s technology and startup ecosystem.