Ola vs Uber

In 2015, India overtook the United States to become the world’s second largest smartphone market, with 100 million smartphones shipped to the country within the year. India’s low smartphone penetration rate (currently below 30 percent) is projected to expand rapidly in the coming years, increasing the potential market for on-demand ride-hailing services.

Ola and Uber may be regarded as the two major players in the ride-hailing service market in India. The rivalry between the two companies has turned ugly in recent months with a bitter legal fight on Uber’s accusation that its rival has been sabotaging its business.

About Ola
Ola (formerly Ola Cabs) is a major homegrown ride-hailing service company in India. It was founded in December 2010 by current CEO Bhavish Aggarwal, and current CTO Ankit Bhati. Ola’s presence in India has redefined point-to-point transportation in the country by allowing any user to easily book a cab from their smartphones.

With more that 350,000 vehicles registered under its network, Ola is presently available in over 100 cities across India, including Bangalore, Delhi, Mumbai and Kolkata. The company claims that it is currently handling over a million trip requests per day and has served more than 25 million customers since its launch, making it possibly the largest mobile transportation and ride-hailing service company in India.

Ola’s core business is in providing taxi-hailing services (Ola Cabs) although it has introduced other ride-hailing and innovative services onto its platform in recent months. Four different cab options are available for users to choose from, depending on their needs:

Ola Micro
Launched in March 2016 to match its rival’s ultra-low cost cab service, UberGO, Ola Micro is touted to be the most affordable air-conditioned cab service in India. Users could book their cab rides for as low as 9 cents per kilometer.

Ola Mini
Low cost hatchback cab service that starts from 19 cents per kilometer.

Ola Sedan
Regular 4-seater cab.

Ola Prime
Users get to enjoy a ride with the best drivers and cars available in Ola’s network. Complimentary Wi-Fi services within the cab are also available.

Other services provided by Ola include:

Ola Autos: Auto-rickshaw-hailing service which currently serves 24 cities across India.
Ola Share: Cab-pooling service
Ola Shuttle: 12 to 20-person shuttle service that connects users to their workplace.
Ola Corporate: Ride-hailing service for corporate travellers
Ola Store & Ola Café: Grocery and food delivery services. Suspended in March 2016 to focus on its ride-hailing services.

Ola supports both cash and cashless (Ola Money) payment options for the services provided on its platform. Ola is also reportedly launching a new post-paid billing service (Ola Exclusive) that allows users to pay for their rides at the end of a billing cycle.

Ola is currently available in more than 100 cities across India. It has also recently partnered with Uber’s three major competitors in the market – Lyft, Didi and Grab, to allow its users who travel overseas to cross-book with these ride-hailing platforms.

Market Share
The company claims that it has an 80 percent share of the Indian cab services market. It currently has a fleet of more than 350,000 vehicles and has served more than 25 million customers.

In March 2015, Ola completed the acquisition of its homegrown rival, TaxiForSure, for US$200 million.

In its latest Series F funding round in November 2015, Ola has managed to raise a total of US$500 million. Its notable investors since its Series A funding round include Tiger Global Management, SoftBank, Steadview Capital, DST Global, Sequoia Capital, Didi Chuxing and Falcon Edge Capital.

Ola is currently valued at US$4.5 billion, placing it as India’s third most valuable startup after e-commerce giants, Flipkart and Snapdeal.

About Uber
Uber is an American multinational mobile transportation and ridesharing service company based in San Francisco, California. It was founded as UberTaxi in March 2009 by current CEO Travis Kalanick, and Garrett Camp. Since 2012, Uber began its international expansion and is currently available in 459 cities in more than 75 countries worldwide.

In August 2013, Uber expanded its operations in India with its initial launch in Bangalore. Uber has since expanded its operations into 27 cities across India, including Ahmedabad, Hyderabad and Udaipur. Uber currently has more than 250,000 driver partners on its platform and is the third largest market after the United States and China, in terms of ridership.

Users can request for a ride through Uber’s mobile app where they will be paired with the nearest available driver based on the services that they have selected. Unlike its international markets, Uber India is focused on providing low-cost rides for its users.

In India, Uber’s services are tailored specifically for the local market (UberX, UberXL, UberMOTO, UberPOOL, UberCOMMUTE), with some of these services available only in India (UberGO, UberAUTO). Availability of these services also vary from city to city.

Ultra-low cost Uber service that is cheaper than UberX. Purported to be a cheaper ride than an auto rickshaw

Auto rickshaw service

Motorbike-sharing service (these have been controversial and banned in some areas-so far)

Users who are driving to and fro work could share their commute with other users who are heading the same direction

Users could share a ride and split the cost with another user who is requesting a ride on a similar route

Uber is currently operating in 27 cities across India with plans to have a presence in 23 other cities by the end of 2016.

Market Share
Uber India CEO Amit Jain has claimed that the company is as big as Ola with a 50 percent market share of India’s cab services market. More conservative estimates however places Uber as having a 35 percent market share.

Uber is committed in investing on its operations in India. To date, it has invested US$1 billion for the Indian market with an additional US$500 million investment expected by June 2016.

Its latest series G funding round which was launched in September 2015 has attracted more than US$5 billion from investors, which include a US$3.5 billion investment from Saudi’s Public Investment Fund in June 2016.

Uber is currently valued at US$62.5 billion.

Final Thoughts
Uber is fast catching up with its biggest rival in India. The huge investment that Uber has poured into the Indian market in recent months is an indication of Uber’s strong commitment to expand its services in the second most populous country in the world. Its expansion plans however may hit a snag as it continues to face stiff competition from Ola.

While the rivalry between Ola and Uber to become the dominant ride-hailing service in India has led to a legal tussle, both companies will have to face an uphill battle to overcome the legal and regulatory challenges found in India.