Need to curb predatory pricing, capital dumping: Ola COO Pranay Jivrajka

Explains Ola's pricing model and shares its views on the draft city taxi rules released by Maharashtra government

Amid loud protest over surge pricing, app-based taxi aggregator Ola has made a strong case for an adequate regulation to curb predatory pricing and capital dumping in the ecosystem in the interest of co-existence of all players. In an interview with Sanjay Jog, Ola chief operating officer Pranay Jivrajka explains company's pricing model and shares its views on the draft city taxi rules released by Maharashtra government.

Chorus is rising against surge pricing by app-based taxi aggregators. What are your views?

We have placed on our record the need for adequate regulation to curb predatory pricing and capital dumping in the ecosystem in the interest of co-existence of all players in the ecosystem.

Maximum and minimum fare are not one of the most important points that we expect from the government because anyway the pricing that we do today is sustainable and we do not subsidise ride prices, so it does not make a difference what you are getting from the consumer — what matters is the subsidy amount.

That is not the case with us, our pricing is anyways 15-20% higher than the competition. So, these prices are sustainable and even on peak or surge pricing that we do is under reasonable limits, and I am sure the government will understand that, so that is not something that we are worried about.

Will the higher permit fee proposed for vehicles which are more than 1400 cc engine capacity impact operations?

The first and most important thing is the license cost per permit to be on platform as it is Rs 2.61 lakhs for vehicles which are more than 1400 cc engine capacity. This is close to one-third of the cost of cars, making it difficult for drivers to pay that amount and eventually everyone will have to take some hit on their bottom lines.

If the driver earnings reduce, our earnings will significantly reduce and we will see an increased price for consumers as the base price will have to be increased. So, that is one deterrent in the overall scheme, even for vehicles which are less than 1400 cc it is Rs 25,000, which is again a lot.

We have suggested that this cost should be significantly lower, regardless of engine capacity because the driver who bought a car two years back would have never dreamt that he will have to pay Rs 2.61 lakhs somewhere in between as EMI all of a sudden.

On the government's proposal that 50% of the vehicles should have the engine capacity of more than 1400 cc, we want to let market forces and demand for rides decide what should be the fleet composition, and it should be a choice to the driver as to what car he wants to buy.

What is your take on the government's proposal allowing Kaali-peeli taxis to migrate to app-based platform?

I think the overall theme has been very forward looking, has inclusiveness, there is a lot of opportunities to co-opt the existing iconic kaali-peelis, the traditional radio taxi players and the cabs that we operate on primary basis.

I think this is a global first policy or a scheme draft which kind of connects both the worlds together and brings everyone to leverage the power that the platform brings in terms of demand, convenience, control to users and improving the asset utilisation for drivers. That has been core to it.

Will the draft rules impact quality, reliability and affordability, and also reduce choice for commuters?

The government says it wants benefits for all stakeholders. What is important is to talk with them. I am sure the government will figure out a win-win situation for all stakeholders.