Ola to ride in Australia to take on Uber

Indian online cab aggregator Ola on Tuesday announced its entry into the international market, starting with Australia, to take on its American rival Uber.

"Ola will make its international expansion, with Australia being the first country. We have begun recruiting private hire vehicles and drivers in Sydney, Melbourne and Perth from Tuesday, with rides expected to begin in the coming weeks," a company spokesperson told IANS.

The company sees "immense" potential in Australia for ride-sharing, which combines technology and innovation, co-founder and Chief Executive Officer (CEO) Bhavish Aggarwal said in a statement here.

"We aim to create an affordable travel experience for citizens and contribute to a healthy mobility ecosystem in Australia," Aggarwal said.

The spokesperson, however, declined to comment, stating "strategic reasons" when asked about the investment going into Australian operations and an exact timeline of when the operations would begin in the country.

According to Ganesh Raju, the startup leader at PricewaterhouseCoopers (PwC) India, it is "certainly difficult" for consumer-focused businesses to succeed in their overseas ventures, due to legal obligations in other countries.

"Business-to-business (B2B) companies generally find it easier to succeed in markets abroad, but historically business-to-consumer (B2C) companies have not seen any merit in going to other markets and dealing with their regulations, market conditions, unless they had a good local partner," Raju told IANS.

For a majority of B2C companies, cracking the Indian market itself takes a long time, with Indian market being so huge, he said.

For consumer-oriented startups, challenges while entering foreign markets involve the legal liabilities, which are usually far more stringent in developed countries than in India, Raju said.

"A lot of spending has to go into popularising the brand to local consumers when consumer-focused ventures go abroad," he added.

In 2015, Paris-based long-distance ride sharing platform Bla Bla Car, a popular service in Europe, entered into Indian market but could not gather much popularity as Indians weren't aware of the brand.

Founded in 2011, Ola has been competing against Uber in the Indian ride-hailing market.

The Indian firm will be taking on Uber, which is the largest ride-hailing platform in Australia, apart from other online cab aggregators operating in the country like GoCatch and Taxify.

Headquartered here in Bengaluru, Ola currently has over 125 million users in India, operating in over 110 cities. On the other hand, San Francisco-based Uber operates in over 633 cities worldwide.

In October last year, Ola had said that it raised $1.1 billion (Rs 7,150 crore) through investors like SoftBank, Tencent Holdings Ltd, a leading Chinese internet firm, and other US-based financial investors.

SoftBank is also the largest shareholder in Uber, after the Japanese telecommunications company recently bought over nearly 15 per cent of the company's stakes.

--IANS

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