Ola Cabs

A PROJECT OF ENTREPRENEURSHIPON BUSINESS PLAN OF OLA CABS   Komal Bakshi (PGFA1429) Pavan Kumar Gautam (PGFA1431) Kunal Madan (PGFA1430) 

Name of company:- olacabs

Contact Details:- 24x7 Call us (022) 33553355 Corp office:

ANI Technologies Pvt Ltd 4th Floor, Sunteck Centre, 37-40 Subhash Road, Vile Parle (East), Mumbai - 400 057 Tel : 022- 30947900 Ph no - 022-30947900

Company registration number:- U72900MH2010PTC240894, registered at Chandigarh.

Date of incorporation:- 3 december 2010

Prospective Financer:- Tiger Global Management, Matrix Partners, Steadview

Capital, Sequoia Capital, SoftBank Internet and Media Inc.

EXECUTIVE SUMMARY

Company Vision

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

Unique Marketing Initiatives:• OlaCabs provided a lot of promo codes on their website to give huge discounts in various segments.

They also started the trends of providing fixed rate drops to the airport when they launch in a city• OlaCabs provides cabs at INR 13 per kilometre whenever Auto Unions call a strike• TaxiForSure provides promo codes on Tuesdays• Uber is way ahead in marketing as they did campaigns during elections (providing Uber at a discounted

rate for voting), UberStud (to encourage referral) and free credits while introducing a new customer. Recently they launched Ubber Chopper by which you can ride a chopper and have a view of your city’s skyline

more than 150,000 Data

of 2013 market share in

India.

FINANCIAL ANALYSIS OF MARKET

• 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

Olacabs  provides different types of cab service:

• 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.

PRICING Flat rate Non airport pickups and drops

Standard Rate

Category Minimum bill Extra km charges Wait time charges

Sedan Rs 150 for first 8 km Rs 13 per Km Rs 2 per min

Mini Rs 100 for first 6 km Rs 10 per Km Rs 2 per min

Prime Rate

Category Minimum bill Extra km charges Ride time charges(for entire ride)

Prime Rs 200 for first 5 km Rs 18 per Km Rs 2 per min

Standard Rate

Category Minimum bill Distance charges Wait time charges

Sedan Rs 600 for first 30 km Rs 16 per Km Rs 2 per min

Mini Rs 540 for first 30 km Rs 13 per Km Rs 2 per min

Prime Rate

Category Minimum bill Distance charges Ride time charges(for entire ride)

Prime Rs 800 for first 30 km Rs 18 per Km Rs 2 per min

DEVELOPMENT AND PRODUCTION PLAN

We used to add around 10 cars a day and now we add 1000 cars a day.

We have more than 60,000 cabs on the platform currently.

We went from 15% market share to almost 70% market share.

We started a completely new business with Kaali Peeli and Autos

We also made huge gains on mobile, with almost 70% of our bookings coming from mobile app, up from 20% last year

Our app serves over 200,000 customers everyday

Over 70% drivers on its platform are independent driver entrepreneurs

• Recently OlaCabs has bought TaxiForSure which was valued at about $125 million for about $200 million

• Olacabs is looking at an aggressive ramp-up to increase its presence four-fold to 200 cities by the end of this year from 64 cities at present.

• Ola, in fact, helps drivers in financing loans at lower interest rates for the purchase of their cars and has tie-ups with car manufacturers.

•  Ola is growing 30% month-on-month with Ola Minis seeing the sharpest growth. Ola Mini is 20-30% cheaper than fares charged on sedans and competes with UberX directly. 

MARKETING PLAN

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.

Making all the difference

Ola driver can never refuse service to a customer When the driver wants to take a break, he has the freedom to turn off the GPS tracker. But, once the

booking is made, he cannot back-out. Ola, as a policy, does not ask where a customer wants to get dropped. Be it 100 meters or 100 kilometers,

our goal is to ensure that the customer’s journey from point A to point B To help maintain its service quality, the company has put in place quite a few criteria

1) First, the Olacabs team holds an operational and functional level audit to assess if the car is worthy of being on the road.

2) Secondly, it holds a training session for the drivers, to bring them up to its standards.

3) Thirdly, the Ola team conducts planned and surprise audits from time-to-time, to ensure that the service is being delivered as per the company’s expectations.

Best practices to build customer satisfaction in a service-oriented business

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

CRITICAL RISKS & PROBLEM

1. Fix your location tracking- The drivers are unable to reach the pick-up point based on the GPS / location from the app. Many drivers have complained that they don't get a clear location or a route map on the apps.

2. Penalize errant drivers- Ola give them a bonus for being online for a certain time daily or weekly. Therefore, many of the drivers keep their apps turned on even when they are unavailable to respond to a request. Some drivers refuse to show up when they realize that the destination is not very attractive to them.

3. Set an example on the roads- While there has been much discussion on improving security / transparency through better verification of drivers, an equally important expectation from Ola is that they would follow safe traffic practices. No mobile phone while driving, following speed limits, obeying traffic lights, using a seat belt, using turn indicators while shifting lanes / turning.

4. Ola cabs stop taking online booking- Olacabs has stopped taking rental booking from all the Indian cities where it operates. Olacabs has indeed stopped accepting rental bookings, citing poor demand behind this move.