OLA Cabs

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Sarthak Singla, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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Founded in December 2010 by the then 26 year old Bhavish Aggarwal, OLA has come far ahead in its journey as a software company. With just 5 years of being in business, the company valuation stands at around $6 billion, backed by strong acceptance by the public and the acquisition of a major competitor – Taxi For Sure. Looking at how the company has been operating and overcoming the inertia a startup faces, OLA is surely there to stay in the long run.

Started with an aim to provide standardized transport not only within states, but also across states, OLA Cabs made the interaction of the customers and the taxi drivers easy and hassle free with the help of a simple mobile based applications. It was soon registered in the minds of people as a cab aggregator company bringing all the private cab owners together at a platform and helping them increase their business through the OLA Cabs app.

The Challenges

When everything seemed to have been going OLA’s way, the unfortunate incident happened in Delhi that led to the Government imposing a complete ban on the operations of any such “Cab Service” company like OLA, Uber, Taxi For Sure, etc. This is when the problems were just beginning to arise for a company like OLA. As the top heads in the company were very sure of their basics about their existence and the work they were doing, combined with the immense faith of their employees in them, they were successful in pulling themselves out of the mess by establishing themselves as a software based company rather than a previously thought to be “Cab Service” providing company.

But, this was just the beginning of the problems awaiting OLA. This followed an incident when a driver on an OLA cab mis-behaved with a female passenger and a court case was filed against the company. Using the same logic of the basic definition of OLA as a software company, the court case went in favor of OLA and this is when the public also started accepting this fact. This is when the company dropped the word “Cabs” from their name and re-branded themselves as OLA.

Next in line was a huge hue and cry against the company when some coding experts were able to hack the OLA software and retrieve their customer’s confidential data. The company executives kept their calm in handling such situations, learned through their mistakes and made appropriate changes in the application.

Next in line was a regulation by the Delhi Government restricting Diesel cabs from operating within Delhi, going from a point to anther within the city, to be effective within 7 days from then. With 65% of its driver’s bookings being met via cabs running on diesel, it was an uphill task for them to bring about a sustainable change. After 48 long hours of brainstorming and 2 sleepless nights at work, OLA managed to lay out an operational plan to abide by the new regulations.

The last two years have been a real test of patience, perseverance and hard work for the OLA management. All the hardships faced have made them what they are today, the market leaders of the industry. All these factors and the taking over of Taxi For Sure for a whooping $200 million has helped them grow their company valuation to this extent.

New Initiatives

Now that they have faced tough times and have come out victorious so well, OLA moved into the bus based travel industry by introducing OLA Shuttle on the same lines as OLA Cabs. To diversify further, they plan to have a go at the food delivery sector by running a pilot program named OLA Café.

My take on OLA as a company would be that after experience both, the testing times and the times of great success in such a short stay in the market, they will be successful in both their new ventures, the OLA Shuttle and the OLA Café, backed by the success of OLA Cabs.

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