Is OLA on a Bumpy Ride?

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 Introduction

Ola, founded in 2010, was India’s first cab aggregator company. Ola aimed to bridge the gap between cab drivers and commuters. Instead of buying or renting out cars, ola helped its customers book a cab on short notice. Ola revolutionized the Indian market by helping its users with the hassle of owning and driving a car on clogged roads, outrageous car maintenance charges, and steep parking tickets.

But even with that Ola is still being pressured to cut costs by investors leading to layoffs, high employee turnover, huge losses, drivers leaving in large numbers, rising costs to customers, and shrinking revenue. Is Ola on its path to downfall? To find out, first, we must check out the rise of Ola.

Rise of Ola

Ola has raised a total of around $5 billion over 29 rounds to date. To maintain its market leadership Ola employed various promotional strategies

  • It helped drivers get cars at huge discounts
  • Ola gave its customers rides at cheap prices by introducing Ola Mini
  • It also partnered with MakeMyTrip for pick up and drop off at desired destination
  • Ola launched its ferry services during Chennai Foods helping stranded people reach their home
  • It segregated their car fleet into Ola mini, Ola Sedan, Ola Micro, Ola Prime, Ola Pink, carpooling for corporate, etc to offer a wide variety of cars to choose from depending on budget, number of passengers, and convenience
  • Ola has also introduced Ola money. The products offered under Ola money include Ola money credit card, Ola money mobile wallet, Ola money postpaid, and Ola money hospicash
  • Ola also launched its first electric scooter under Ola Electric

All of this helped Ola gain drivers as well as users at a staggering pace making it the market leader.

One might wonder, Ola so far seems like a perfect and unique-of-its-time business, so where did things start to plummet? Let's read further to find out.

Reasons behind the Downfall of Ola

1. Poor Services

There are various issues faced by Ola users namely- the problem of women's safety, dropping customers at wrong locations, drivers' behavioral issues, and Ola drivers themselves asking for directions. In addition to these challenges, the lack of any proper system to handle customer grievances has led to the fall of Ola.

2. Surge Pricing

Drivers just concentrate on one location, switch off their app, create artificial scarcity and then use the second phones to keep track of the rising prices. Once the surge begins due to high demand, they log in again.

3. Cancelling ride without notice

Isn't it the most frustrating? According to various OLA users, Cab drivers take a long time to arrive and at last, the ride is called off by the driver without citing any valid reason.

4. Failure of Ola EV

Due to increased incidents of fires and explosions in OLA electric scooters and bikes, Ola's CEO recalled some batches of electric scooters in April 2022, leading to a big financial loss and great damage to the company's image.

5. Impact of Covid-19

The fallout of the virus has been very tough for Ola as their revenue has come down 95% over the first 2 months of lockdown, thus affecting the livelihoods of millions of drivers along with their families across the country.

Current Scenario

The pandemic was obviously the toughest time for all cab companies across the world. And as the pandemic struck, the situation of Ola drivers became really miserable who had to pay their bills even during the lockdown, but Ola failed to provide them any stable income and many were forcibly laid off as a result now we have much fewer cabs on the roads.

The shortage of cabs has ultimately led to skyrocketing fares, due to which people are now looking at rikshawalas with hope. Even Ola drivers went on a strike in April 2022 for the revision of fares due to increased CNG prices.

So, what is really the problem with OLA, the company was a pioneer in the start-up ecosystem, founded by a bunch of passionate IITians? Is it failing now? Let us know your views in the comment.

    References:

  1. https://bit.ly/3Apog7J
  2. httpshttps://bit.ly/3un6KwY
  3. https://bit.ly/3AsK8yT
  4. https://bit.ly/3Iga5Ub
  5. https://bit.ly/3yiojj3
  6. https://bit.ly/2JMGfdG
  7. https://ride-share.com/ola-vs-uber-similarities-differences-and-you/


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