Business and Revenue Model of Ola Cabs

1. Ola Cabs was founded by Bhavish Aggarwal and Ankit Bhati, both are IITians in 2010. ANI Technologies Pvt Ltd was named as Ola. It was founded as an online cab aggregator.

2. Ola is basically an on-demand taxi service under which people with smartphones can book a cab on their smartphones without going to the taxi stand or calling to the taxi driver.

3. Initially, Ola Cab used to operate as a Fleet Cab Service Provider during its starting days. You call their call center, tell them the time and date of the trip and get a car at your doorstep pretty similar to Meru Cab but later they doing work as an app based cab aggregator.

How Ola Works?
4. Primarily customers has to install the app of Ola Cabs from Google Play Store or Apple ios. Ola Cab app autodetects your location and provide different cabs with different rates like Mini, Micro, Prime Sedan,Ola Share. When you book a cab, app provides you the current location of your driver,his name, his mobile number and his photo so that you can identify him and coordinate with him so that he can come near to your location.

5. Ola cabs are cheap as compared to black yellow (kaali peeli) taxis and provide security, comfort, cost savings and convenience to the customers.

How Ola Earns?
6. Ola takes commission from the fare charged from the customer ranging from 15-20% depending upon the city and type of vehicle and the balance amount is remitted to the driver in the form of incentives.

7. If you want to start your business through your car, you can start with Ola by partnering with by providing your owned car for Ola rides and drive your own car or appoint an driver. There is no employer - employee relation. You earn on the basis of how many rides you do, how was your performance, how much rating is given by the customer.      

8. If you don't have your own car, you can take the car from Ola and pay them installments and some initial amount. You have to bear extra burden if you take the car from Ola.  

9. You can become a fleet operator with Ola if you have many cars, then you can do live tracking of all your cars, check your fleet performance anytime, monitor driver login and other details.  

10. The Trip Fare is a combination of  Travel Time (in minutes), Distance Cost, Waiting Time, GST on the aggregate amount.

11. Ola Cabs now provide free wifi, Ola play where you can watch videos, listen music and many more.

12. Ola Fare in Delhi

13. Ola saw its losses widening to Rs 4,897.8 crore, even though its total income grew 70 percent during FY 2016-17, as compared to previous fiscal.

Ola App Interface
14.

Ola Funding
15. Ola raised around $3 Billion through RNT Capital, SoftBank, Tencent, Yes Bank, Tekne Capital, Falcon Capital, Steadview Capital, Sequoia Capital, Tiger Global etc.

Acquisitions by Ola
16. Ola acquire Taxi for Sure in March 2015 for $200 million, Geotagg in Nov 2015, Qarth in March 2016, Foodpanda India in Dec 2017 and Ridlr in Apr 2018.

Investments by Ola
17. In the past one year, Ola has invested in Mswipe Technologies ($31 mn), Ola Fleet Technologies ($500 mn) and Vogo Rentals ($7 mn).

Strategy of Ola
18. Initially when Ola launch, to mark its presence in the country, it provides incentives to customers like first ride free, upto 50% discount for first 10 rides and many more and for more business partners engaging with Ola, Ola provides them with plan that if your cab takes more ride, then you can earn around Rs 1,00,000 per month and some drivers who don't own their car and drive Ola's car are now bounded by the scheme of Ola because now they have to pay the EMI of car taken from Ola. Now Ola is reducing the incentives for customers and growing their business and in 2-3 years, Ola comes in profits. This is the story of every startup, to make their image between the people of a country, they have to give incentives, discounts, free products or services to make their presence between the people and after they establish themselves, they start charging more from the customers because now customers become habitual of using the products or services and it becomes their necessary and they don't bother to pay more for purchasing the product or rendering the services.     

SWOT Analysis of Ola
19.
a) Strength 

i) First Mover Advantage - Ola started back in 2010 and had the first mover advantage in comparison to its competitors which started very late in the segment.

ii) Product Line - Ola offers a wide range of product line which starts from offering services like bikes, auto and different types of cars. It also offers various kind of services like local commuting, outstation and rentals and share cabs.

iii) Technology - Technology is the backbone of Ola, With strong data analytics it helps to forecast the demand in a particular area so as to provide balanced supply of cars for the commuters.

iv) Dynamic Pricing - Ola has been using dynamic pricing model to rate the ride according to the demand of the rides in a particular region or during the bad weather conditions. This helps to manage the supply in a efficient manner. 

b) Weakness

i) No Control over Drivers - Drivers play an important role in making the brand name of Ola and hence any misbehaviour of the driver with the customers directly sabotages the image of the brand in the market.

ii) Fake Rides - Ola drivers have started asking customers to book fake rides so that there ride counts increases and Ola has no control or visibility over this.

iii) Dependence on Internet - Customers can only book rides if they are connected to the internet. As in India, the connectivity is an issue and hence customers are not able to book rides. 

iv) Market Segment - Though they market themselves as mass segment usage people who are tech savvy are able to use the services. In India, the ratio of tech-savvy people is very less as compared to the non-technology users.

c) Opportunities

i) Wider Market - In order to attract non-tech savvy customers, Ola has to rethink of their business model where such segments can also make use of their services and it will be the big breakthrough as it helps to enhance the customer base.

ii) Increasing Internet Penetration - With the increase in the initiatives taken by the government to make smart cities and penetrate the internet to remote places as well provides Ola with an opportunity to focus on these regions and expand their services to Tier 2 and 3 cities as well.

iii) Poor Government Transport - In Tier 2 and 3 cities there is a lack of proper government transport facilities and hence this opens door for Ola to look into those cities and capitalize on the opportunity.

d) Threats

i) Government Regulations - Government regulations regarding taxi service industry is unclear at the moment.

ii) Customer Satisfaction - With bad customer services and presence of Uber in the market makes the customer switches the brands.

iii) Competition - There is increasing competition in the market due to the presence of Uber and other emerging players in the local region.

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