Homegrown ride-hailing company Ola has announced its maiden entry into a foreign territory with a foray into the Australia market. The seven-year-old company said it has started on-boarding private hire vehicles (PHVs) and driver-partners in three Australian cities Sydney, Melbourne and Perth from Tuesday. “We are very excited about launching Ola in Australia and see immense potential for the ride-sharing ecosystem which embraces new technology and innovation,” said Ola co-founder and CEO Bhavish Aggarwal in a statement. However, Ola did not mention when it would launch its services in Australia. Ola today is the largest ride-hailing company in India with a presence in over 110 cities, with over 125 million users and about 1,000,000 driver-partners across cabs, autorickshaws and taxis. The Australian foray will see Ola facing its familiar competitor, Uber. Both the companies have been engaged in a fiercely competitive battle in the Indian market. However, this time there is a commonality with both players, as SoftBank is an investor in both these companies as the single largest shareholder.
Uber has emerged as the leading player in the Australian market and had entered the county in 2015; it had to initially face regulatory challenges to start its operations. Besides Uber, the other players in the ride-hailing business in Australia are Taxify, a Europe-based company and another local firm GoCatch. The entry of Ola will actually witness a four-player market and it remains to be seen how it will fare in the market, as the company did not provide any other details of its planned Australia foray. “More details will be shared later regarding the commencement of commercial operations which is subject to necessary regulatory approvals,” the company said in its release.
To be successful in the Australian market Ola may have to kick-start with a pricing war. According to media reports, Taxify, which entered the Australian market, is offering half-price fares and without any surge pricing, which was initiated by Uber. Taxify, founded in Estonia in 2013, has a presence in Europe and Africa, and has over 3 million customers across more than 20 countries. Ola was founded in 2011 by Bhavish Aggarwal and Ankit Bhati. The company has received close to $3 billion in funding till now, which includes leading investors such as SoftBank, DST Global, Tencent and Sequoia capital, among others.
A filing with the Registrar of Companies stated that for the year ended March 31, 2016, Ola had a consolidated loss before tax of Rs 2,313.66 crore and consolidated revenue was Rs 758 crore.