Professional Documents
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ENTREPRENEURSHIP
ON
BUSINESS PLAN
OF OLA CABS
Komal Bakshi (PGFA1429)
The vision behind Ola cabs is to provide hassle-free, reliable and technology-efficient car rental service to
Indians.
Revenue Model
Runs on a pay- for- performance model. OLA charges a commission in whatever sales they make. Also to get
access to technology platform. OLA charge taxi owners a small fee.
Technology
One of his ambition is to be able to deliver a cab within 20 minutes from the time of booking. For this, the
company is making use of data analytics, so that they can forecast demand for its services on a daily basis.
Based on this data analysis we intend to providing service within 20 minutes of booking. At present it is
around 30-35 minutes.
Target Market
Ola cabs is targeting three sectors of market that is providing services to customers for outstation, city taxi
and local rentals .These services are offered by making variation in fleet those are luxary , sedan, hatchback
and ola mini.
Financials
• Raised angel funding from a bunch of individual investors, including Rehan Yar Khan and Anupam
Mittal
• Series A funding from Tiger Global of over $ 5 million
• Series B round of funding led by Matrix Partners India for a big minority stake, with participation from
existing investor Tiger Global Management of $20 million
• Series C round of funding led by Hong Kong-based hedge fund manager Steadview Capital and
Silicon Valley-based Sequoia Capital of (Rs 250 crore ) $41.8 million.
• Series D round led by Japanese internet and telecom giant SoftBank of $210 million
• Series E or fifth round of institutional funding, it is back in the market to scoop between $300-500
million more.
• Russian billionaire Yuri Milner’s DST Global and Singapore’s GIC has proposed to fund around
2500 crore Rs on 20th March 2015
Management
Olacabs, founded in January 2011 by two IIT Bombay alumni Bhavish Aggarwal and Ankit Bhati is
India’s largest aggregator of car rentals and point-to-point cab services , hour-based rental services or
outstation travel.
We’re a two-member team Ankit is the CTO and handles the technical aspects, from building the website,
building the backend platform, scaling servers etc.
Bhavish Aggarwal is the CEO and I handle the operator partnerships, sales and operations. And yes, we are
looking at hiring like- minded and passionate people for technology and product development roles.Ola
has also hired professionals for corporate affairs, public policy, marketing and category management
among others.
BUSINESS IDEA AND OPPURTUNITY
• Our market is large enough because India’s rate of vehicle ownership is low to 41 per 1000 people and
ranks 128th worldwide
• The population of India is 1.2 billion which is large enough for our company to capture the market
• It is estimated that the radio taxi market in India is $6-9 billion dollars growing at 17-20%. It is also
estimated that the number of taxis in the organized sector will reach 30,000 by 2017.
• We believe that technology will help make this industry efficient and drastically improve the consumer
experience in years to come
Unique offerings
• Customers can book cabs through its apps, website and even call centre
• Facility of cashless payment by offering an in-app pre-paid wallet will allow customers to recharge their
account through a credit card
• Auto bookings available on its platform in beta mode across six cities in India
• ‘Ola Pink’, cabs driven by women drivers and is only for women passengers in Bangalore.
• It also started adding the conventional black & yellow cabs of Mumbai to its platform.
• The firm roped in Gurgaon-based background-verification firm AuthBridge to vet the drivers.
• Firm released an SOS button for customers, which, when activated, sends out all ride details in real-time
including GPS coordinates to pre-set friends and family members of the user via SMS and e-mail.
• Ola Prime’s business class experience fleet includes cars like Toyota Innova, Altis, Skoda Rapid and
Honda Civic
• Ola Mini fleet include hatchbacks like Tata Indica and Nissan Micra amongst others.
• Ola Sedan is present and includes cars like Suzuki DZire, Mahindra Verito and Toyota Etios.
INDUSTRY SEGMENTATION AND TARGET MARKET
• The Indian radio taxi market alone is pegged anywhere between $6-$9 billion dollars by
different estimates, and is forecasted to grow at 17-20% annually.
• the organised taxi market constitutes only 4-5% of the market in terms of sheer number of
vehicles. The rest is by operators who own fleets of 2-50 cars and typically have a presence in
1 or 2 cities.
COMPETITIVE ANALYSIS
Starting Up:
• Olacabs started its operations in 2010 from Mumbai under the name of ANI Technologies Pvt. Ltd.
• TaxiForSure.com started its operation in 2011 from Bangalore under the name of Serendipity Infolabs
Pvt. Ltd.
• Uber started its operations in India in 2013 starting from Bangalore, but the parent company operates
under Uber Technologies Inc, incorporated in the state of Delaware, US
Going Mobile:
• OlaCabs launched its Mobile App on Android first, followed by iOS in 2012 followed by Windows in
2014
• TaxiForSure launches its Mobile App on Android & iOS in 2013 followed by Windows in 2014
• Uber started its operations in India (2013) with Android and iOS apps. Uber App on Windows platform is
published by Caro Apps
• For 2013-14, ANI Technologies, which runs Ola Cabs, reported a 50 per cent jump in net loss at Rs
34.21 crore (Rs 342.1 million), against Rs 22.80 crore (Rs 228 million) in 2012-13, according to
filings with the Registrar of Companies
• TaxiForSure, also facing a nationwide ban, has widened its loss, too. Infolabs, the holding
company for TaxiForSure, reported a loss of Rs 17.08 crore (Rs 170.8 million) for 2013-14,
compared with a profit of Rs 3.02 crore (Rs 30.2 million) the previous year.
• For 2013-14, Meru Cab Company, which runs Meru Cabs, reported its maiden profit, of Rs 3.55
crore (Rs 35.5 million).In 2012-13, it had recorded a loss of Rs 31.11 crore (Rs 311.1 million).As
of March-end this year, the company’s accumulated loss stood at Rs 215.24 crore (Rs 2.15 billion).
• Mega Cabs, which owns and has been operating taxis round the clock across six cities since 2001,
reported a loss of Rs 2.55 crore (Rs 25.5 million) on revenue of Rs 36.37 crore (Rs 363.7 million)
for 2013-14.
• The company, which claims to have the largest radio taxi network in India, had posted a net profit
of Rs 12.18 lakh (Rs 1.21 million) on revenue of Rs 39.55 crore (Rs 395.5 million) the previous
year.
• In terms of revenue, Ola Cabs, backed by private equity funds Tiger Global and Matrix Partners,
has reported solid growth.Its Rs 51-crore (Rs 510-million) revenue in 2013-14 was 219 per cent
higher than Rs 16 crore (Rs 160 million) the previous financial year.
• TaxiForSure, backed by Hellion Ventures and Accel India, had revenue of Rs 4.29 crore (Rs 42.9
million) in 2013-14; Meru Cabs did not disclose its revenue details
• There are 19 radio taxi operators in the country, including Mega Cabs, Easy Cabs, Meru Cabs and
Tab Cabs, according to the Association of Radio Taxis. These operators run about 25,000 cabs
across India, generating combined revenue of Rs 70,000-80,000 a cab every month, the association
says.
• Of these, Easy Cabs is operated by Carzonrent (India), which also has other businesses such as a
personal ground transportation service.It offers short- and long-term car rental solutions through its
fleet of 6,500 cars
• There are about 6,00,000 taxis in India, generating combined annual revenue of about Rs 11,000
crore (Rs 110 billion).
PRODUCT
• Ola Prime — A business-class car service for luxury travel available in a few cities offering bigger cars
like Toyota Innova.
• Ola Sedan — A regular-class car service aimed at providing the customers a spacious car for comfortable
travel with cars like Toyota Etios.
• Ola Mini — An economic-class car service to serve customers looking for affordable personal
transportation with cars like Tata Indica.
• Ola Pink — A car service driven by a lady driver service lady travellers.
• Ola Auto — An auto service provided to the customers, removing the need for haggling the price with the
drivers.
Ola cab takes more than 150,000 bookings per day and commands 60 percent of the market share in India as
per the data of 2014.
Flat rate
PRICING
Non airport pickups and drops
Standard Rate
Prime Rate
Standard Rate
Prime Rate
We used to add around 10 cars a day and now we add 1000 cars a day.
We also made huge gains on mobile, with almost 70% of our bookings coming from mobile app, up from
20% last year
With a few taps on the Olacabs application on any of the android-based phones, users can call a cab
One of his ambition is to be able to deliver a cab within 20 minutes from the time of booking.
Company also make use of demographic details while evaluating a region. The demand visualisation is
done on a daily basis, so that accordingly we can have our cabs in areas where demand is high at specific
hours
Company has focused on creating a technology platform that will act as an umbrella for small car rental
firms
Olacabs is addressing point-to-point cab services, outstation cab services and full-day rental services.
Olacabs have been successful in getting 600 suppliers on board with 1,000 cabs in Mumbai.
The company claims to do 2,000 bookings on a daily basis. We want to take this to 3,000 per day by the
end of this month.
The new service will offer the same starting fare as autorickshaws, that is, Rs 13 per km but with a base
fare of Rs 100 for the first six kms, making it the cheapest AC cab service available in the city.
• With Ola the customer has a hassle-free commute. With the touch of a button, a cab comes to your
door, takes you where you need to go. Not a single word, you pay your fare at the end and go.
• Taxi aggregation company Ola cabs on Tuesday launched its low cost service called Ola Mini
across three cities and flagged off a new 'Business Class' service Ola Prime, across six major
metros.
• Ola will offer AC compact cars like Tata Indica, Vista and Ford Figo under the Ola Mini service.
Customers can book the cabs online by calling Ola’s call center or through the Ola mobile app.
• With Ola Mini, customers will also get the usual cutting edge services like the ability to book and
track the cab through their mobile phones, e-mailed receipts, accurate meter and well trained
professional drivers.
• The 3-year old company has launched Ola Prime, a business class service for customers with a fleet
that will include cars like Toyota Innova, Skoda Rapid, Honda Civic etc.
• The company has priced Ola Prime between Rs 17 to Rs 20 per km across different cities, almost
similar to the rates that Uber and Meru Cabs are charging in various cities.
• Ola Cabs, mobile application for cab bookings, has partnered with the famous black and yellow
cabs in Mumbai.
By using the cab, a customer can see all the partnered cabs around him, by entering the location and
confirming the request the drivers in the vicinity will be alerted though the smartphone. Customers have
a option of selecting the normal black and yellow cab or a cool cab.
1.Understand the pain point-Put the customer first: Ensure that the customer is at the centre of every initiative
and his/her experience is delivered to the best of your ability
2. Offer a seamless experience- From the time a customer reaches out to you till he receives his invoice, makes
the payment and shares feedback, the experience should be seamless. For us, consistency in communication
across our web, SMS and e-mail applications helps us achieve this.
3.Take care of your other stakeholders- In our case, the drivers and operators are our stakeholders and they
play a critical role in determining the overall experience.
4. Always action feedback- Slip-ups will happen occasionally. Be quick to accept, resolve and ensure it never
repeats again.
FINANCIAL PLAN
Funding
• Series A funding from Tiger Global of over $ 5 million
• Series B round of funding led by Matrix Partners India for a big minority stake, with participation from
existing investor Tiger Global Management of $20 million
• Series C round of funding led by Hong Kong-based hedge fund manager Steadview Capital and Silicon
Valley-based Sequoia Capital of (Rs 250 crore ) $41.8 million.
• Series D round led by Japanese internet and telecom giant SoftBank of $210 million
• Series E or fifth round of institutional funding, it is back in the market to scoop between $300-500 million
more.
• Russian billionaire Yuri Milner’s DST Global and Singapore’s GIC has proposed to fund around 2500
crore Rs on 20th March 2015
REVENUE
• ANI Technologies, which runs Ola Cabs, reported a 50 per cent jump in net loss at Rs 34.21 crore, against
Rs 22.80 crore in 2012-13, according to filings with the Registrar of Companies (RoC).
• Ola Cabs, backed by private equity funds Tiger Global and Matrix Partners, has reported solid growth. Its
Rs 51-crore revenue in 2013-14 was 219 per cent higher than Rs 16 crore the previous financial year
• The Ola Cab is owned by the driver. For every ride that he makes, he takes the ride value from the
customer. Twenty per cent of the total ride value comes to Ola as commission.
• There is a lot of discounting offered by multiple players on multiple levels. We’ve refrained from doing
this. Occasionally, we take this route (discounting) but those are very limited period offers. For us, we
believe that our drivers are our customers. We need to be serving them and as entrepreneurs, they need to
sustain for themselves.
• Ola Mini (that offers as low as Rs 10 per kilometre) was tested intensively. The revenue the driver earns
by reducing the fare from Rs 13 to 10, is overall about 35-40 per cent more than what he was getting
earlier. This make it very rich and exciting for all the drivers.
ORGANIZATION AND MANAGEMENT
• Olacabs aims to foster entrepreneurship among drivers and operators through its aggregation business
model making transportation economical and efficient for customers in India.
• Ola don’t owe a single car. Every car that we have in the Ola fleet is owned by a micro-entrepreneur, a
driver or an operator.
• Ola has a team size of over 500 people. As of today, it has partnered with over 4,500 operators.
• At Ola, the customer experience is carried forward until a customer reaches his/her destination. At the end
of the day, they expect a fuller consumption cycle and that is what we are trying to deliver.
• It works on a revenue sharing model with the operators, where, depending on the category and size of the
operator, the latter will pay 10 per cent to 20 per cent of each transaction value to Olacabs.
• The company will also be investing in technology to support its data analytics division, which will
enhance customer experience and help drivers plan their inventory better..
.
• There is also a freely downloadable mobile app using which customers can book cabs and monitor their
position by the built-in GPS system
• We have a dedicated customer care centre to address all queries of our customers. Technology has enabled
us to adhere to the 10 minute service level agreement (SLA) which we provide to all our customers
• We also use ‘heat maps’ to efficiently manage the demand and supply of cabs in various parts of a city at
different points in time.
• The company is also in the process of helping other stakeholders (such as the Government and public at
large) benefit from Olacabs’ traffic heat-maps and pothole detection mechanisms
• Not having our own fleet actually works to our advantage. We only select cars which meet our defined
standards to be a part of our fleet.
• We also conduct regular service audits, train and certify drivers and do thorough background checks of
both operators and drivers before partnering with them.
• The inventory utilisation among small cab operators (ownership of 2-5 cabs) in India is an abysmal 40-
50%. Cab owners benefit from the Ola Cabs network and technology platform and that in turn helps them
procure customers and enhance their income through better inventory utilisation
OWNERSHIP
Olacabs, founded in January 2011 by two IIT Bombay alumni Bhavish Aggarwal and Ankit Bhati is India’s
largest aggregator of car rentals and point-to-point cab services. Olacabs integrates car transportation, be it
point-to-point services within a city, hour-based rental services or outstation travel, onto a technology
platform, ensuring convenient, transparent and quick service fulfillment for the customer. Customers can
access Olacabs, on the web, through a mobile app or through a customer service centre