Bhavish Aggarwal and Ankit Bhati are combating regulatory hurdles and competition from Uber: After all, 300 million trips—India's daily demand—is the prize, and Ola wants to win most of it
Bhavish Aggarwal is no longer trying to sell a white-water rafting trip in Haridwar. That is so 2010, when he had just entered the world of enterprise with Olatrip.com, a “travel agent” or so his parents had alleged at the time. Instead, having successfully set up one of India’s most valued startups, he is fighting for the lion’s share of an estimated 300-million trips being taken by India—daily. He may have the first-mover advantage, but Aggarwal’s Ola, the homegrown cab-aggregator and investor favourite, will not have a smooth ride to supremacy. It will have to contend with regulatory impediments and, of course, that four-letter word: Uber.
Aggarwal has also put to rest any worries about his professional career: From being the one-man call centre agent for his own holiday-booking company to building one of India’s most-valued startups and the leader in the country’s fledgling ride-hailing market, he has evolved into an ambitious entrepreneur.
Today, he and Ola are set for their next stage of growth. While Bhati, co-founder and CTO, is obsessing over turning the technological underpinnings of Ola into a strong “platform to serve a billion people,” Aggarwal has put together a team of A-listers from Nokia, Microsoft, Flipkart, Rocket Internet, LeasePlan and Infosys, among others, collecting the talent he needs to propel the startup to its next orbit. They have built new services such as Ola Micro—a Rs 6-per-kilometre cab service; Wi-Fi on Ola Prime; Ola Share, for those willing to share their ride and the fare; Ola Shuttle, for rides on mini buses; and a luxury service, Ola Lux. Their app supports nine local languages and counting: “What should we do next, maybe deliver content?” says Raghuvesh Sarup, a senior vice president at Ola and its head of categories—he is the point person for each of the different services the ride-hailing app company offers. Sarup is also the company’s chief marketing officer.
He has delivered multi-billion dollar projects at Nokia and then at Microsoft over a career spanning 20-plus years, including a stint at Procter & Gamble selling Camay soaps. He is a strong believer in building Ola’s business units into a cohesive whole that is greater than the sum of its parts. That means, when an Indian consumer thinks of Ola, he/she must be aware of everything from the autorickshaw option to the luxury sedan, with Wi-Fi as “today’s novelty, tomorrow’s hygiene”. “Think of Ola as a brand house, not a house of brands,” Sarup says. “That is what we want to build.”
Bhati, 29, who is about a generation younger than the 45-year-old Sarup, offers another perspective: “See if electricity is there and it’s working perfectly, no one particularly appreciates it… but if it goes off, that’s when you feel it.” He wants Ola to become just as ubiquitous a utility—always present, completely unobtrusive and massively effective, ferrying hundreds of millions of people every day.
Before that, Ola has to contend with formidable competition from Uber Technologies, which has made India a priority market. Uber is just as determined to establish itself in India as Ola is to hold on to and consolidate its lead. Even though Uber is present in only 27 cities in India, versus Ola’s 100-plus, it has targeted top-tier markets, and today has 350,000 “driver-partners” in India. It is also “very close” to fulfilling a million rides a day, Uber said in an email to Forbes India.
Uber, with its deep pockets, has invested in its own operations centre in Hyderabad and has, more recently, opened a local engineering centre in Bengaluru—its first in Asia, CTO Thuan Pham pointed out when he flew in personally to inaugurate the centre in March. There was no cap on how many people the centre could hire; that would only depend on the growing scope and size of the work planned for the centre, he had said. For starters, the Bengaluru team will be “the tip of the spear” for Uber’s innovations for the local market, Pham said at the inauguration.
Now, there are two sides to this ever-burgeoning rivalry between Ola and Uber. One, it is creating micro entrepreneurs out of tens of thousands of drivers across the country, helping them get bank loans for new cars so that they can join one of the networks. Consumers are getting not just subsidised fares in quality vehicles, but are the beneficiaries of one-upmanship promotional activities: Take, for instance, lotteries to decide who gets to meet popular Bollywood stars at their movie launches, or cricket legends such as Sachin Tendulkar.
The other side of this competition is less pleasant. In fact, it has the makings of an increasingly public and ugly spat that has already resulted in a lawsuit. In March this year, Uber accused Ola of directly tampering with its business in India, with a host of complaints, including false bookings. The litigation is ongoing and will next be heard in July. “We think that the allegations are frivolous. We’ve categorically denied it to the honourable court. We also have this sense, or we speculate rather, that this is a reaction to another case that was filed by Ola against Uber for violating a court order,” says Anand Subramanian, Ola’s director for marketing communications.
Subramanian is referring to a ban on diesel vehicles in the National Capital Region of Delhi, which required diesel cabs to be taken off the roads by April 30. Unbearable air pollution in Delhi has triggered massive public anger, pushing authorities to mandate the use of CNG vehicles. As a response, Ola conducted a ‘mela’, called Ola Pragati Mahotsav, and invited drivers on its network to trade in their diesel cars for CNG vehicles. The company would spend as much as Rs 200 crore to make the switch, it had said in March.
Amit Jain, president of Uber India, says that the impact of this ban hasn’t been significant on his company because “this was a dialogue that was happening for quite some time”. “Over the last several months, our team made a concerted effort to bring on board more and more cars with CNG, and to help driver partners with existing diesel cars to sell them or get other cars with CNG; this has happened over the last six months,” he tells Forbes India.
That said, states recognise the value and popularity of the cab-hailing app services—for instance, Bengaluru is said to have not enforced its rules rigidly when the recently concluded Indian Premier League finals took place in the city—and unlike in the West, there is no great tussle between operators and cab-service providers in India. “Net, net, has there been any disablement? No. I don’t believe regulations are a hurdle,” says Matrix’s Bajaj.
Bhati makes no bones about where they were placed: “The problem we had was the disadvantage of the [lack of] technical depth, essentially. Our base systems were created for a very different reality—it was like using a bullock cart on a race track. That was the place we were in.” In the next year to 18 months, he adds, “we would have grown by 50-100 times”.
(This story appears in the 24 June, 2016 issue of Forbes India. To visit our Archives, click here.)