 "Pranay Jivrajka")
India’s taxi-hailing service market is becoming competitive. Ola, the incumbent leader in India, has four times the reach of rival Uber, which it is modelled on. The company, which has raised about $1.2 billion from SoftBank and Tiger Global, says it has scratched less than one per cent of the overall market opportunity. “Now, it has gone to the next stage where people prefer not buying a car,” Ola Chief Operating Officer Pranay Jivrajka tells Bibhu Ranjan Mishra & Raghu Krishnan. Edited excerpts:
Ola is burning a lot of money. Where are you headed?
We are creating value. We have the potential to take a bigger share of the pie and grow the market. Speculation was that a few years ago, the market was at $5 billion; now, it is upwards of $8 billion. The need for commute has grown slightly, but the convenience to commute has grown drastically. That is where we come.
Ola has more presence than Uber? But the top eight cities contribute the bulk?
The top eight cities contribute 85-90 per cent. But, the smaller cities are growing pretty fast. They are in different grades. One grade of cities is Jaipur, Coimbatore and Mysuru, where the adoption is clear and growing fast. The second category is Ujjain, Gwalior etc, where we are growing because of the customisation. There are markets where smartphone penetration is not so great, but it is growing — markets in eastern India. It is a very good trend, and it is sort of behaviour change.
Are you still burning money?
I would put it as deploying the right capital for investments and leveraging the right markets to make money. If we want, we can become profitable today. But there is a large enough market out there to expand and take that share. We reinvest in the market, expand these markets and grow our market share.
Where actually are these funds going within Ola? You are an asset-light company…
The major part is going in the supplier ecosystem, which is backward integration of how can we integrate more cars on the platform. Also, ensuring how we can do better engagement benefits for the drivers, loans for their children’s education. We partner with organisations and firms who have those capabilities.
Are you seeing a shift wherein customers are putting off plans to buy cars because of companies such as Ola and Uber?
Until last year, we saw many people holding decisions of not buying a second car. Now, it has gone to the next stage where people prefer not buying one. What I personally aspire to see? My friends who have a car saying: ‘I want to sell my car.’
You spoke about having a one-mn fleet; where do you stand?
We have 350,000 vehicles, including auto rickshaws and taxis. Of this, the number of cabs would be 270,000. We have enhanced our capacity to absorb 100,000 more vehicles, and there is a demand for it also, today. At the current scale, we get a million requests a day. It increases day-by-day. By 2017-end, we should have a million vehicles in our network.
What are the other opportunities for growth?
The biggest is Ola Share. This will bring down the cost further for a ride; bring more driver economics and better utilisation of inventory. How can we make it more convenient; how can we extract more value on the ground with leasing, building the ecosystem, ensure drivers are happy and they make more money? Earlier, on an average, 1.25 people were travelling in a cab per day. The driver can do 3X and there’s immense demand that is addressable.
