Softbank funded ride-hailing firm Ola is facing a roadblock ahead of its entry into Sri Lanka after a local rival accused the Indian firm of “commercial espionage” when its team was researching the market opportunity in Colombo and other cities in the island nation.
The Bengaluru-based Ola in a statement has dismissed the allegations as “absolutely friviolous” while not commenting further due to the matter being subjudice.
A local court in Colombo has directed three Ola executives Karan Veer Singh Shekhawat and Nimit Joshi - who are also directors of ANI Techologies Lanka Ltd, the local subsidiary and operations manager Murali Barath to present before it on February 26, Sri Lanka’s daily FT reported on its website.
The executives were doing market research, a requirement before the Indian firm sets up operations in the island nation and take on global rival Uber.
Ola, which had initially focused on dominating India, is looking to spread wings in neighbouring countries such as Bangladesh and Sri Lanka. Last week Ola said it has begun inviting private hire vehicle owners in the cities of Sydney, Melbourne and Perth to sign up on its platform as it looks to replicate Uber’s model of expanding into newer markets and grow its presence.
It said the commencement of its commercial operations in Australia is still subject to necessary regulatory approvals.
The Indian firm’s expansion comes at a time when Uber has been directed by its newest and largest investor Softbank, a common investor, to focus on its traditionally strong US and European market. This strengthens Ola’s position in India and allows it to expand into newer markets in the region, which currently has little competition from’other Softbank funded firms.
Ola’s resolve to expand was strengthened after it managed to raise $1.1 billion from investors such as Tencent, Softbank, UC-RNT and Falcon Edge over the last 12-18 months.