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Three things Ola's latest funding means

Taxi aggregator Ola on Wednesday raised $500 million in Series F, at a rumoured valuation of $5 billion.

twitter-logo Goutam Das        Last Updated: November 26, 2015  | 13:28 IST
Three things Ola's latest funding means

Goutam Das, Senior Editor, Business Today
Taxi aggregator Ola on Wednesday raised $500 million in Series F, at a rumoured valuation of $5 billion. What does this mean for the consumer, the taxi driver, and the company itself?

1. The consumer: The good times are likely to continue for a bit longer - your daily rides will continue to be discounted. What's more, it might nudge the competition to do away with surge pricing. For its lowest priced service, Mini, an Ola ride can be as low as Rs 8-10 a km, depending on the city. Make merry while it lasts.

MUST READ:Ola raises $500 million from SoftBank, others

2.The driver: A press release from Ola says the funding would be used for "fuelling supply initiatives". Not very clear what it is, but likely, the company would continue to heavily incentivise drivers to join its platform and stay loyal. Securing the supply side has become a slugfest between Ola and its multinational rival Uber. The funding would help Ola retain its market share from a supply perspective. To be in business, all aggregators must discount the consumer on one hand but also compensate the driver on the other side.

3. The company: Ola gets more fuel in the tank to fight Uber, which announced a $1 billion budget for India in July 2015. Ola is now in 102 cities - it might expand to more or simply consolidate its position in a few of them. It is likely to beef up its auto aggregation business (in six cities now), Ola Share (in beta mode) as well as the aggregation of Kaali-Peeli taxis in cities such as Mumbai.

 

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