Hola Ola: A New Taxi Service On The Block?

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Ride hailing apps such as Uber and PIckMe are all the rage these days. They offer easy to use apps that help you get from one place to another without hassle, which is why people use them. That being said though, this spawned a plethora of rival apps from other taxi companies, all competing for the same space. Regardless, Uber and PIckMe seem to have the lion’s share of the market to themselves. But that may change in the near future.

Indian Ride hailing company Ola is looking to test the waters out in Sri Lanka. The company, which operates in over 100 cities across India is keen on international expansion and as such, Sri Lanka, along with Nepal and Bangladesh are its initial targets. Founded on the 3rd of December 2010, Ola was valued at $5 billion in September 2015, thus solidifying its position as a Startup Unicorn.

Why is Ola planning to launch in Sri Lanka?

Well, the answer to that question is Uber. Uber and Ola are fierce rivals in India. Ola actually was part of a two-year alliance together with Lyft, Didi and Grab to share each other’s resources in order to compete with Uber. That all change when Didi bought over Uber’s operations in 2016 and decided to merge Uber’s china business with their own operations. Now that the alliance is over, Ola is looking to be a direct competitor to Uber, hence they are looking to move to Sri Lanka, Nepal and Bangladesh.

Ola
Image Credits: Quartz

Hints of Ola planning to launch outside Indian soil first appeared when a member of talent acquisition at Ola, Naveen Narayan posted on his LinkedIn account that they were looking for applications for Operations experts in Dhaka and Colombo. Furthermore, Ola also raised $36 Million from Tekne Capital Management and a further $250 Million from Japan’s SoftBank Group in April 2017. Then you also have the fact that more competitors such as Mahindra & Mahindra too are setting up their own taxi hailing app and Baxi, which is an online motorbike taxi company is entering the taxi aggregation market as well.

Ola
Hints of Ola setting up shop in Sri Lanka appeared after this LinkedIn post
Image Credits: MediaNama

Uber has seen its fair share of trouble. From lawsuits of sexual harassment by both passengers and employees, to Travis Kalanick, CEO of Uber resigning, followed by other senior level staff members resigning, Uber is in a bit of a pickle. This makes it an ideal time for Ola to gear up and launch their operations in order to expand their business and maybe even capture some of Uber’s market as well.

Another Taxi service? Well why not?

All in all, I feel that if Ola were to launch in Sri Lanka, it wouldn’t be a bad thing at all. They are indeed welcome in Sri Lanka, simply because it gives us more ways to travel. You’ve probably seen how there are no PickMe vehicles in the morning and also in the evening after 4.30PM. Uber on the other hand, gives you 50% off your ride but then adds surge pricing to it so you actually end up paying what you normally would for an Uber ride (or perhaps even a bit more).

However, we still don’t know how taxi drivers in Sri Lanka would react to another taxi hailing service launching in Sri Lanka. Pricing is another issue we have no idea of. For example, if Ola were to launch in Sri Lanka and have ridiculously low per kilometer fares, that would essentially disrupt the entire taxi market system in Sri Lanka and force taxi services to revise their fares. This would mean that taxi drivers themselves would see less revenue, which can lead to tricky situations.

Still, it’s important to remember that the coming of Ola to Sri Lanka isn’t set in stone. They’re just testing the waters. Will they like what they see? Will it be profitable for Ola to expand to Sri Lanka? Only time will tell.

5 COMMENTS

  1. UBER’s pricing is so messed up. they give 50% off and charge the same on surge, without even informing the customer that there;s a surge. Also they randomly charge credit cards. No local support provided. On emails some random Indian responds who at times is not helpful at all. UBER has failed in localising UBER in Sri Lanka. PickMe on the other hand is very helpful. Local support given, and so much more, no hidden charges too.!

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