Is OLA on a Bumpy Ride?
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:
- https://bit.ly/3Apog7J
- httpshttps://bit.ly/3un6KwY
- https://bit.ly/3AsK8yT
- https://bit.ly/3Iga5Ub
- https://bit.ly/3yiojj3
- https://bit.ly/2JMGfdG
- https://ride-share.com/ola-vs-uber-similarities-differences-and-you/
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