Australia a key market, Ola says amid reports of reduced operations

At a time when Covid-19 is pounding the transportation industry, it has been reported that Ola has closed local driver offices in Australia and suspended personal accident insurance for drivers there

Amid reports suggesting that cab aggregator Ola might be reducing its operations and staff in the Australian market, the Bhavish Aggarwal-led and SoftBank-backed company has clarified that ‘Australia is a key market’ for it, and that it is focused on growing its business there.

In the wake of the Covid-19 pandemic, which has pounded the transportation industry, some reports claimed that the Bengaluru-based company was closing its local driver offices in Australia and suspending personal accident insurance programmes for its drivers in that country. Some reports also said that Ola’s Australian managing director Simon Smith, who had joined the firm in 2018, had left it.

“Australia, in no uncertain terms, is a key market for Ola and we are focused on growing our business in the region,” said an Ola spokesperson. “We continue to operate with great energy and success for providing a safe and trusted ride-share service for Australian customers and driver partners in more than 30 cities across the country.”

As part of its efforts to drive greater synergies and efficiencies in the business, Ola said it had made some changes to the organisational structure. “We are committed to the region (Australia) and shall continue to invest in high growth opportunities, setting a strong foundation for realising our long-term ambitions.”

 

Ola had launched its service in Australia in 2018. This was its first overseas market, as it was seeking to fulfil its global ambitions in line with competitors like Uber, Grab and Didi Chuxing. It bolstered its presence in Australia by appointing Simon Smith as its managing director. Smith was playing a pivotal role in building Ola’s presence including strategy, marketing and product development, according to sources. His mission included building the future of mobility in Australia and creating impact for millions of consumers and tens of thousands of driver-partners. Among his previous roles, he had been CEO of eBay Australia, non-executive director of Sportsbet and a consultant at McKinsey.

Ola is serving over 250 cities across India, Australia, New Zealand, and the UK. The firm launched its operations in the UK starting with Cardiff in August 2018. It was steadily expanding across the country and was serving millions of users across Birmingham, Liverpool, Exeter, Reading, Bristol, Bath, Coventry, and Warwick, it said earlier.

Ola was valued at $6.5 billion when it raised funding from vehicle maker Hyundai last year. However, in May this year, Ola laid off 1,400 employees, or over 33 per cent of its workforce, due to the coronavirus pandemic. It saw a massive slump during the lockdown. But green shoots are said to be emerging for the firm now. With the Indian economy opening up almost entirely, the company is now seeing a recovery close to the pre-Covid level, with close to 100 per cent recovery in key cities during the festive season. The increased demand is expected to continue, say sources. The opening of offices, malls and more leisure travel for airports and stations has played a role: People prefer cabs and autos to public transport. The highest use cases are for outstation as people travel to their native places.