Ola unit ties up with Nissan Motors to lease cars

Bengaluru: Ride-hailing company Ola said its leasing unit Ola Fleet Technology Pvt. has partnered with auto maker Nissan Motor India as part of a previously announced programme to buy and lend cars to its drivers.

Under the partnership, Ola will buy and lend the Nissan and Datsun brands of cars from the Japanese company, Ola said in a statement on Tuesday.

The partnership is part of a new cab-leasing programme it announced in September (See Ola starts buying cabs, lending them to new drivers) as Ola made a strategic shift in its business to a part inventory model in a bid to build exclusivity with drivers and stave off competition from arch-rival Uber.

Ola had then said that the company along with the car makers will invest ₹ 5,000 crore into the new unit over the coming year. Ola said it will invest ₹ 500 crore into the unit, which will eventually independently raise more money.

On Tuesday, the company, owned by ANI Technologies, said it plans to tie up with more such partners through which it expects to add 100,000 drivers to its platform by the end of next year.

It also plans to use the insights on the mobility preferences of its millions of customers to procure more vehicles through these partnerships.

Through the programme, Ola drivers can lease a car by paying an initial deposit and then making monthly payments, with the option of owning the vehicle after three years.

Until recently, Ola didn’t own the cars on its platforms. Like Uber, Ola offered a technology platform to connect drivers with prospective riders. Through the leasing programme, Ola will effectively invest money to buy cars.

The leasing programme also allows the cab company to maintain exclusivity with its drivers who often shift between the technology platforms of Ola and Uber.

The shift in business model comes at a time when the both companies are engaged in a battle to dominate India’s fast-growing cab-hailing market. Ola claims to be the leader in India with nearly 80% share of the market. Uber, on the other hand, is chipping away its dominance claiming 40% market share.