We will expand to 200 cities by 2016: Uber’s India rival Ola

Ola’s Anand Subramanian in a chat with e27, reveals growth plans and how the company is looking to mobilise a billion Indians

Anand Subramanian, Senior Director of Marketing Communications, Ola

The country’s largest taxi- and auto- hailing app Ola, has been grabbing headlines for all the right and wrong reasons – from its run in with the government to the buzz about its fundraising to its new services.

In a potential pool of a billion customers, Ola has its eye on strengthening its dominance in the mobility market.

The Mumbai-based company is aiming to double its reach to 200 cities in the next financial year. With shuttle services and a leasing model, Ola is blitzing ahead with a flurry of new offerings to take on its global rival Uber.

e27 caught up with Anand Subramanian, Senior Director, Marketing Communications at Ola – the man with the answers.

Here are the edited excerpts:

Ola is now moving beyond the taxi and auto aggregation business, where do you see the company placed in the next couple of years?

The overall approach that overarches everything that we do is our focus on mobility.

We believe that mobility is something that in a country like ours is completely underserved. We want to enable mobility for a billion Indians. In India, only 3 in 100 people actually own a car and the personal transportation system like taxis isn’t great. Also, our roads are not built to accommodate the 70 per cent per capita ownership of personal cars.

So the only solution there is to build mobility as a service where people do not have to own a car but can use a car just like they would use any other service and not as a product lying in the garage. The idea is to build multiple use cases within the platform and make it available to people who would like to use it in a particular way.

What is the update on your planned shuttle service?

The pilot has been going on for the last couple of weeks, specifically in Gurgaon and Bangalore. Gurgaon has seen very good traction in the pilot. We will come up with an announcement soon.

You are also entering the leasing model space. How does that work?

Leasing to us is a very strategic approach to problems on the supply side. In India, we have a low per capita personal car ownership, and we don’t have high-quality supply available in abundance either. This means you have to enable access for people to become drivers in terms of upskilling, in terms of growing them as skilled professionals.

While the government is taking care of the licensing part, we took on the mandate of upskilling – in terms of training, familiarising them with technology. Basically, training them to be high-quality drivers to deliver on the platform.

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Does leasing solve any of the operational hurdles you were facing earlier?

The leasing model solves a very different problem. Before leasing we enable driver entrepreneurship through access to financing, wherein we say the primary issue for the driver is his ability to buy a car. So we have put together the leasing model in such a way that a subsidiary company of Ola leases cars out to drivers, the driver pays minimum deposit initially and pays a monthly rental. And at the end of the year, a choice to be able to own the car if he wishes to. This is not a demand constrained market, it’s a supply constrained market.

Does this leasing model also work for shuttle services?

At the moment it is only for cars, we are exploring partnerships with car manufacturers, financiers to be part of our leasing model. Over time, we will figure out where it is headed.

After taxis, auto and now shuttle service, what is the next step for Ola?

Our main focus is to go deeper into existing markets, building more use cases for them.

Bangalore, for instance, still has more appetite for newer use cases, it could be a new categories or across improving existing categories and going deeper into them. But all of them are underlined with the same thread, which is enabling mobility and that will continue to happen and that’s the broad focus line at any point of time.

I can’t give you specifics, but there’s definitely more on the horizon because the market needs it.

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What about geographic expansion?

We are present in about 100 cities today and we intend to be doubling this number in the coming year, so next financial year we should be in about 200 cities. That’s the goal that we have set for ourselves.

Would you also want to take Ola overseas?

If you look at the car ownership statistics and the number of taxis in India, there is still so much headroom to grow here. We are only serving a small part of a country of a billion people.

So we are extremely focussed about being in India and solving the mobility issue in here. There is phenomenal headroom to do that and we have been doing that really well because we understand the hyperlocal approach that transportation takes.

What about competition? How do you think this market has evolved and where do you see it heading in the near future?

At the end of the day, for the customer it is choice and availability that matters most. All that a customer looks for is do I get a cab within five minutes at any given point of time.

For a driver it is about consistent revenue, it is about predictability, it is about winning as an entrepreneur on a platform.

To that extent, I think what will work in its favour is the size and scale of the platform and the ability to grow.

Today in India, we are talking about a market share of around 80 per cent the two brands Ola and TaxiforSure put together, which is far larger than any other competition put out there. Market share is something that is a result of our understanding and building of a product that benefits both the driver and customer.

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Do you think there is scope for consolidation in the market?

Consolidation will happen when a larger part of the market is being served. Today we are still talking about a small part of the market which is being served.

It’s about building for the masses. It’s about building for multiple use cases for the entire country, rather than just focussing on the elite or crème-de-la-creme in the top five-six cities. It’s about going deeper into cities, it’s also about going wider across each city. To that effect, the market is still very nascent, though it is growing very fast.

After TaxiForSure are there any other inorganic growth opportunities that might interest you?

From time to time, we will definitely look at interesting associations. It could be in the form of an acquisition, it could be in the form of a partnership. It could be in any form but what’s most important is the value that they bring to the table.

TaxiForSure, for instance, brought tremendous complimentary value both on the drivers’ side and customers’ side. It operated on a very different model than what we did. TaxiForSure worked on the supply side with operators, not with driver entrepreneurs and that was a significant departure from what we did. Over time where we see more such value coming in, we will be open to work with other organisations.

Is an IPO on the cards anytime soon?

Not anytime soon because we are looking to go deeper [in expanding our business]. And we personally believe that despite having a large market share we are still only scratching the surface. There is so much headroom to grow and we are currently in an investment stage in the market. We intend to invest and grow the market first that’s our real focus.

All your expansion will be around mobility, no chances of a business unit that grows into other business opportunities as well?

So from time to time we will ensure that different elements enable the overall experience but the clear focus is on mobility. If you look at what we are doing with Ola Money today, it is a very integral part of the overall transportation experience. The transportation experience is in a way defined by the payment experience.

Today Ola Money can be used for multiple things, you can shop online with Ola Wallet, book on Oyo rooms, shop on Lenskart, renew your music subscription to Saavn.

But what we are trying to do there is to build a wallet that is extremely seamless but can be primarily used for the Ola platform.

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