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Ola is focusing on the domestic market, and that’s a good thing

While ridesharing companies like Uber, Lyft and Didi Chuxing are trying to expand their operations overseas, Ola– the Indian on-demand ridesharing service — plans to dominate its domestic market. The company recently announced its launch of a new shuttle service costing just US$1.

Unique from its competitors

India is one of the fastest moving economies in Asia. It has a population of 1.3 billion and has increasingly evolving middle class who are armed with disposable income and smartphones. The online transportation company is backed by investors like DST Global and Softbank, and it is reported that the project will initially be available in two major cities, Gurgaon and Bangalore.

The project launched on September 21st and has five hundred shuttles covering one hundred routes. Ola plans to announce expansion to other cities in the succeeding quarter.

Sundeep Sahni, Vice President of New Initiatives at Ola, was the Co-founder of Rocket Internet’s Lazada before joining the online car hailing company. He said the main aim of the new project is to attract commuters who would otherwise opt to ride in their bike, cars or auto-rickshaws.

And the cost of the fare is US$1, which is comparatively lower than hailing the private taxis that cost about US$4 to 6.

Shuttle service

The shuttle service is shared with 12 to 20 people and has many other facilities like in-vehicle entertainment, Wi-Fi access and air conditioning.  Bhavish Aggarwal, Co-founder and CEO of Ola, said that the company is targeting millions of people in the country who use their own transport for their daily commute.

The idea is to offer them a reliable and comfortable commute experience just with the click of a button from their smartphone, thus bringing in effectiveness at scale.

It also benefits the people who work with the ridesharing company, as it provides efficient mobility for millions of commuters in the country.

The initial service has 100 shuttles covering twenty routes, and does not work like the regular Ola service when it comes to partnering with suppliers.

The shuttle service ties up with limited fleets that will be smaller than the company’s main service, which links the riders through independent contracts with vehicle owners. Still, riders can use the mobile app to track the shuttle on the map using the GPS service and book the seats and pay for the trip.

The future of car sharing

The company’s plan to establish the shuttle service came in April as Ola raised US$400 million in a Series E funding round, with an overall capitalisation estimated at US$ 680 million.

The company already had plans of investing the funds in scaling up the company. VP for New Initiatives Sanhi said that Ola plans to use a minimum of US$50 million for the new project.

Ola’s main service is live in more than a hundred cities, and it covers auto-rickshaws, traditional taxis and other vehicle types. Every day, its 250,000 registered vehicles service around 750,000 rides.

On average, the company registers 1,500 new vehicles a day. The company also has plans of venturing into on-demand food delivery, patterned after Uber’s own food delivery service, which rides on its ridesharing platform.

Online transportation rivals in the home market

The San Francisco-based Uber is the biggest rival for Ola in India, and industry observers greatly anticipate Uber’s expansion into the country. According to Softbank, one of Ola’s investors, the company has around 85 per cent market share in the country, while local ridesharing rival, Meru, covers around 12 per cent.

However, Uber itself estimates its operations to be at par with Ola, in terms of trips completed.

There are many other car sharing companies in the country that might launch an offering similar to Ola’s own shuttle service. In July, Meru introduced its carpooling service and a similar service was offered by TaxiForSure (which is also owned by Ola, but scuttled just a few months ego).

In 2015 BlaBlaCar entered the Indian market, also offering a ridesharing service. The online ticketing platform RedBus focuses on the commute between cities, but there is also an opportunity for the company to expand its service into the shuttle commuting market.

Also Read: Ola to raise up to US$300M from SoftBank to give Uber a run for its money in India

As of now there is no similar shuttle-based on-demand service in India, and Ola is the first transportation service to introduce it, and so it has a huge first-mover advantage in the local market.

Upcoming projects and plans

There are a lot of benefits in introducing a shuttle sharing service, like better efficiency, less pollution and limited number of vehicles on the road. There are some private services that operate exclusively in one city, like Delhi NCR’s Shuttl, Bangalore’s ZipGo, and Mumbai’s Cityflo.

Also Read: This Indian scientist grows solar panels on trees

Meanwhile, Ola has other plans, mostly targeting the domestic market.

Share service: The service was confirmed by the company in April after it received its latest funding roundThe service went live on September 21st in two cities.

Application interface: Ola opened its API to developers, allowing them to integrate the services of the platform into their mobile apps. This lets third party apps integrate into the platform, with ride information, such as availability, vehicle tracking, booking, travel time estimates — all based on the transportation network’s data. Uber has notably introduced a similar system earlier.

Number masking: Ola also introduced a new number masking feature, which hides the users’ phone numbers from the driver. Meanwhile, phone calls made by the driver are recorded and saved in the company’s database in India. This involves an integrated cloud telephony service that sends numbers in an encrypted form to the drivers. All communication is routed through the cloud. This feature helps the company to protect user information.

Car leasing program: Ola has introduced a new leasing program, wherein drivers can lease vehicles with a minimal monthly deposit and a three-year payment plan. The program was launched in Chennai, Bangalore, Hyderabad, plus three other cities in India.

Loyalty program: In Bangalore, riders who opt for Ola Prime get a superior car with free Wi-Fi service driven by the best-rated drivers. Apart from Bangalore, the program is now available in Chennai, Pune, Jaipur, Delhi and Hyderabad, with an option for SUVs or sedans.

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Anand Rajendran is the Co-Founder and CEO of Snoota, one of the top Android app development companies in Chennai. He is a passionate blogger and SEO Specialist who writes articles on various topics. Snoota is a software product developed by his company that has launched its Taxigen script, which is a Uber Clone Script for Android and iOS apps.

 

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