Amid reports of cab aggregator rivals Ola and Uber being in talks for a possible merger, Ola’s co-founder and CEO Bhavish Aggarwal said that there has been no such conversation and Ola’s ride-hailing business is very profitable and growing well.
“We have absolutely rubbished those reports,” said Aggarwal on Monday at a company event. “Those who know me would know that I would never acquire a loss-making business.”
The Covid-19 pandemic has hurt the transportation industry. But Ola said that the firm is one of the most profitable ride-hailing companies in the world with a strong balance sheet.
The mobility company, backed by SoftBank, is repurposing some of its infrastructure and capabilities toward boosting the sales and service network of its electric vehicle arm Ola Electric. To ramp up its electric vehicle business, the ride-hailing platform has laid off around 500 employees. Ola said these layoffs are taking place across departments amid a challenging funding environment and a delay in listing plans for the firm.
The company recently shut down its used vehicle business Ola Cars and quick-commerce business Ola Dash, which promised 10-minute food delivery.
The company has also shut down Ola Cars within a year of its launch as it shifted focus to its electric two-wheeler and car verticals. Ola has also shut down Ola Cafe, Food Panda, Ola Foods.
“Our ride-hailing business is very healthy, profitable and growing well. We are also increasingly going into financial services,” said Aggarwal. “We shut down businesses where we believe there was not enough long-term strategic relevance for us. We started these businesses maybe two years back like the used-car business and we shut it even though we were leaders in that. But our vision is to sell electric vehicles.”
Regarding the Ola Electric business, the company has also been in the news for all the wrong reasons. Recently safety concerns were heightened when an Ola electric scooter burst into flames in Pune. Many customers have been complaining about the scooters, leading to greater scrutiny of electric vehicles. Customers have also reported frustration related to delays in deliveries and a few technical glitches.
When asked about how the company is addressing the concern related to customer trust, Anshul Khandelwal, chief marketing and revenue officer, Ola Group, said there were few isolated incidents of fires across the industry which included multiple brands. “It was not specific for us. A lot of innovation is taking place in this area (EVs) and a rare and isolated incident can happen,” said Khandelwal. “There was a lack of trust in the industry. But now our network is the largest and most reliable with 24 hours of service.”
The company’s newly built Ola Futurefactory is the world’s largest women-only factory. It is also being expanded to become the largest two-wheeler factory in the world with an annual production capacity of 10 million units, contributing to one of every seven two-wheelers sold in the world.
“A lot of people said how we are going to do this, but we did it. We will keep bringing more exciting technology and products,” said Aggarwal. “Today we service more than 75 per cent of our customers in one day. Tell me about any other automotive brand which can claim that.”
Before the launch of Ola’s electric vehicle last year, Aggarwal said the EV penetration in India was just 1 per cent and now it is 5 per cent. “Who (enabled) this change? If this was left to legacy players, nothing would have happened.”