Ola to invest Rs 5,000 crore to expand cab leasing business

Mail Today Bureau   New Delhi     Last Updated: September 15, 2015  | 08:50 IST
Bhavish Aggarwal, co-founder & CEO, Ola
Bhavish Aggarwal, co-founder & CEO, Ola

Taxi aggregator app Ola will invest Rs 5,000 crore in the coming year to expand its newly formed cab leasing business. The Bangalore-based firm has also roped in former Lease-Plan India executive Rahul Maroli as vice president (strategic supply initiatives) to head the leasing business, which will operate as a fully-owned subsidiary company.

According to a company statement issued on Monday, under the programme, drivers can lease a car for a minimal initial deposit of Rs 35,000 and monthly lease payment (of about Rs 15,000) with an option to own the vehicle after a period of three years.

Ola said that it plans to introduce another 1,00,000 cabs under the new scheme by the end of 2016.

"This will open up opportunities for hundreds of thousands of drivers to turn entrepreneurs in the long run while giving them instant access to a stable income," the company said in a statement.

It added that the programme has a dedicated capital of more than Rs 5,000 crore, which will be infused for scaling up the leasing programme in the coming year. Up to Rs 5,000 crore of capital will be infused towards this programme in the coming year.

"Ola will invest Rs 500 crore to begin with and will raise funds independently for this subsidiary in the time to come", the company added. "More than 1,000 vehicles in Bangalore, Chennai, Hyderabad and three other cities are already on road as part of the pilot", it said.

For the pilot, a majority of vehicles were sourced from Maruti Suzuki India. An Ola spokesperson told MAIL TODAY that this would be a pan-India programme to be rolled out in phases and would cover Delhi and NCR as well.

"By December 2015, at least, 10,000 cars are expected to be on road under the leasing model", Ola said.

Ola cabs were banned by the Delhi government as the company was not running CNG-fuelled vehicles, which are mandatory in the capital because of the green norms.

Other radio cab operators in Delhi such as Meru and Easy Cabs had complained against Ola for running diesel vehicles.

An Ola spokesperson said that the company has now introduced CNG vehicles for Delhi and technology enables customers to order CNG cabs on the Ola app for Delhi while diesel cabs can be booked for use in the NCR or outside tourist destinations.

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