Ola Announces Investment of Rs 5,000 Crore in Cab-Leasing Trade
Ola Cabs, also popularly known by the name Ola, is a mobile app-based solution provider for personal transportation based in India. The company has tie-ups with many of the taxi stands or individual cab drivers and cater to its ever-growing customer base in metro cities like Delhi, Pune, and Chennai.
The company was started in the form of an online cab aggregator and was based in Mumbai, but now has shifted its headquarters to Bangalore and is also ranked among a few of the fastest growing and emerging business models in India.
The company was founded by the duo, Bhavish Aggarwal (current CEO), and Ankit Bhati on 3rd December 2010 and by the year 2014, the company had managed to expand and include an estimated volume of 200,000 cabs in its network to cater to its customers in 85 cities.
Also around the middle of the last quarter of the year 2014 the company experimented with the extension of its service by including the facility to book auto rides, the trial service was started in Bengaluru and by December 2014 after seeing the positive response from the customers the company made its offering of auto ride-booking online in other cities also.
In order to further strengthen and improve its standing in the market, the company has decided to invest a whopping sum of Rs 5,000 crore in the upcoming financial year and magnify its presence in the freshly molded business of cab-leasing. The venture will unlock new possibilities and opportunities for revenue generation for the company.
The new leasing business of the company will be spearheaded by Rahul Maroli in the role of Vice President of Strategic Supply Initiatives; formerly he was the executive of Lease Plan India.
The new leasing business will function as a fully-owned supplementary company. However, the details regarding the subsidiary company were not shared.
Under this scheme, the drivers can enter the lease agreement for a car with a minimum deposit of Rs 35,000 followed by monthly lease costs of around Rs 15,000, and also they have the option to own the leased vehicle after a time frame of three years.
In a statement, Ola shared its vision and said, “This will open up the opportunity for hundreds of thousands of drivers to turn entrepreneurs in the long run while giving them instant access to a stable income”.
To scale up the leasing program the company has kept aside a capital of Rs 5,000 crore which will be injected and invested in varying amounts in different phases of its operations.
Adding further the company also mentioned, “Up to Rs 5,000 crore of capital will be infused towards this program in the coming year. Ola will be investing Rs 500 crore, to begin with, and will raise funds independently for this subsidiary in the time to come”.
The company claims to have more than 1,000 vehicles on road in cities like Chennai, Bengaluru, Hyderabad, and the other three cities as part of the pilot test.
And added further that, “For the pilot, a majority of vehicles were sourced from Maruti Suzuki India BSE 0.06 %. Ola is in advance talks with car manufacturers and financial institutions to enable this model for over 100,000 driver-partners by the end of 2016”.
Ola added that it expects to get at least 10,000 cars on the road as part of its leasing scheme by the end of December 2015.
In a recorded statement, one of the co-founder and CEO of Ola Cabs, BhavishAggarwal added, “We believe that this first-of-its-kind leasing program brings a unique benefit to driver-partners to turn entrepreneurs. Rahul’s rich experience shall help us scale this business rapidly and in making this program an industry benchmark”.