Ola to be profitable in two years, says Bhavish Aggarwal
New Delhi: Despite stringent competition, home-grown cab hailing firm Ola is steadily gaining market share and expects to be profitable in two years, claimed Bhavish Aggarwal, chief executive officer of ANI Technologoies Pvt. Ltd, which owns Ola, at an event on Friday.
“Our focus remains to build a robust and an impactful business,” Aggarwal said at India Internet Day, an event organized by The Indus Entrepreneurs (TiE).
This comes at a time when Ola, along with its US-based rival Uber Inc., is recovering from the setback of nationwide strikes by its drivers due to withdrawal of incentives and bonuses. Both Ola and Uber drivers went on strike in Delhi and Bengaluru in February.
Aggarwal said Ola is working towards building a sustainable business model that balances all prices for both drivers and rides. “We have introduced intercity cab services, corporate bus services so that same set of drivers see a career path with us… the ones who own one car, are able to become fleet owners,” Aggarwal said.
Aggarwal admitted that ride-sharing is an intense business worldwide, but disagreed that it is not a winner-takes-all market.
“Competition is such that ride-sharing companies were giving customers discounts and drivers were getting subsidised, a nature of competition that other (traditional) sectors like FMCG (fast moving consumer goods) haven’t seen, who fought on margins,” he said.
“(Competition between) Uber and Didi was (like) World War II, both had nuclear bombs (heavily funded…China had an advantage over its foreign rival; India is not like that,” he added.
In 2016,Uber sold its China operations to its rival Didi, ending an expensive price war and increased its focus on other markets, including India, a market which it has been reported that Uber cannot afford to lose
Ola claims to have over 500,000 drivers, which will grow to two to three million drivers in next few years. In its increased focus on drivers, Aggarwal added that the company is setting up institutes to skill these drivers; 10 of them have been established.
Both Ola and Uber together registered 500 million rides being booked in 2016, nearly a fourfold increase from a year earlier, according to a report by market research and advisory firm RedSeer Management Consulting Pvt. Ltd, Mint reported in February,