Ola's outstation service grows 2X; tier-2 cities contribute the most

Ola is planning to scale up its ‘outstation’ business vertical, which provides inter-city mobility service to tier-2 cities across the country. The ride-hailing giant sees a huge opportunity in this segment. 

The company, which competes with US rival Uber, aims to capture a market that is poised to grow to $15 billion in the near future. 

The trigger for expansion is the company’s  ‘outstation’ unit, which has grown double its base size. It has become a profitable vertical in Ola’s group business, according to sources.

Major growth for Ola’s outstation business is now expected to come from smaller cities such as Manipal, Roorkee and Aligarh. 

Ola is building innovations to cater to the unique needs of these towns. Ola said India’s inter-city cab market largely consists of unorganised players.

“With a 2X growth in the past 12 months, Ola outstation is the fastest-growing major player in India’s inter-city cab market. We remain committed to further enhance the customer experience and make inter-city travel more accessible to everyone,” said Arun Srinivas, chief sales and marketing officer at Ola.

Ola is also forming alliances with hotel partners and the tourism boards of several states to enrich the travel experience and offer customers a complete package for their inter-city travel.

“We are thrilled with the response that Ola outstation has received from both customers and driver-partners. One-way trips, in-trip insurance, and widespread availability of cars even at the last minute make Ola outstation a more convenient and affordable offering than other players,” said Srinivas. 

He added, “Our ability to standardise the experience across the country, and enable seamless payment options have made the offering quite popular with corporate customers as well, giving them better control and out-of-town employee travel.”

Since its launch in 2016, Bengaluru-based Ola’s outstation service connects 11,000 unique destinations across the country, second only to the Indian railways in terms of network. 

The inter-city travel can be accessed by Ola’s total user base of over 200 million users and 2 million driver-partners. Ola said recent trends have shown that millennials plan their outstation trips in the last minute. 

These users prefer Ola due to immediate availability.

The outstation experience is designed to make inter-city travel more reliable, offering better control to customers with in-app safety features such as an emergency button, and 24/7 helpline. 

It enables them to track their rides real-time and share ride details with loved ones.

Customers who need to travel just one way out of town can choose to do so from any of the serviceable locations. 

They could book round-trips for as low as 2-3 hours, making them more affordable compared to local players, said the company. 

Customers also get to choose from a range of hatchbacks, sedans, SUVs and even luxury cabs in some select cities.

NEW AVENUES

• Ola is tapping the inter-city cab market, which is poised to be $15 billion

• Major growth for Ola’s outstation business is now expected to come from the smaller cities

• The service connects 11,000 unique destinations and is second only to the Indian railways in terms of the network