ENTREPRENEURSHIP

MANAGEMENT

Nirav Shah, Shweta Bouddh ,Sushmita & Swati

Bouddh ASSIGNMENT -1
 INTRODUCTION

Ola cabs were

founded by
Bhavish Aggarwal
Trading name OLA
and Ankit Bhati
Type Private
on 3rd December
2010. Both were Industry Transportation

IIT Guwahati Technology

student. Founded Mumbai, Maharashtra, India (3 December

2010; 6 years ago)
Ola was Founder Bhavish Aggarwal
operating under Headquarters Mumbai, Maharashtra, India[1]
ANI Technologies Key people Bhavish Aggarwal (CEO)
Pvt.Ltd. Ola was Services Taxicab, Vehicle for hire
founded as an 418.25 crore (US$62 million)[2] (2014-15)
Revenue
online cab
Profit -754.87 crore (US$110 million) (2014-
aggregator in
15)
Mumbai, but is
Number of 5000 (2015)
now based in employees
Bangalore. www.olacabs.com
Website

In 2014, the company had expanded to

a network of more than 200,000 cars
across 100 cities. In November 2014, Ola
expanded to incorporate autos on-trial
basis in Bangalore.

Ola is valued at $5 billion as of

September 2015.In March 2015, OlaCabs
acquired Bangalore based cab service
TaxiForSure for about $200 million.
By November 2015, Ola had acquired
Geotagg, a trip-planning applications
company, for an undisclosed sum to
strengthen its new bus-shuttle service.
 Ola provides different types of cab
service ranging from economic to luxury
travel.
The cabs are reserved through a mobile
app. This cab service supports both cash
and cashless payment options with Ola
money. It claims to clock an average of
more than 150,000 bookings per day and
commands 60 percent of the market share
in India.

MOTIVE

Motive behind it is to provide hassle free, reliable and technology- efficient

car rental service to consumer. The idea of using technology to offer a better
and more predictable experience to consumer, right from easy online access
to car rental bookings , quality assurances through reviews / ratings and
proper information about the car and the driver.

TARGET MARKET & SEGMENT

TARGET

Customers who need cabs instantly.

Ola cab is targeting three sectors of market that is providing services to
consumers for outstation, city taxi and local rentals.

SEGMENT

People who mobile from one place to another for any purpose.
These services are offered by making variation in fleet those are
o luxury
o Prime play
o Prime Sedan
o Mini
o Prime SUV
o Micro
o Auto
o Erick.
UNIQUE SELLING PROPOSITION (U.S.P)

FOR END USERS:

o Safety rides on accurate time with advance booking scheduling

o Cashless rides

FOR CAB DRIVERS/OWNERS:

o Can get assured booking instantly & earn more

o Worry free maintenance for cabs

MISSION AND VISION OF OLA

The vision behind Ola cabs is to provide hassle-free, reliable and technology-
efficient car rental service to Indians and to revolutionize personal
transportation in the country. Olas mission to up-skill drivers and help them
become entrepreneurs. To grow business whilst reducing the environmental
impact of their operations and increasing our positive social impact. To be a
socially conscious business and it has always displayed the highest Standards
of corporate citizenry.

HOW THEY ACCOMPLISH IT

Company will 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 will focused on creating a technology platform that will act as
an umbrella for small car rental firms
The new service will offer the same starting fare as auto rickshaws, that
is, Rs 13 per km but with a base fare of Rs 100 for the first 6 kms.,
making it the cheapest AC cab service available in the country.
Taxi Aggregation Company Ola cabs on will its low cost service called
Ola Mini across cities and flagged off a new 'Business Class' service Ola
Prime.
They will launch Ola Prime, a business class service for customers with
a fleet that will include cars like Toyota Innova, Skoda Rapid, and Honda
Civic etc.
Manage social media communications and customer support.
Always ask for customer feedback to improve the experience.
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.

2013-14: Ola generated 510 million revenue ,that was 219 % than 160
million of the previous financial year.

BACKEND ACTIVITIES- OPERATION

BACKEND TEAM
Product Manager :Usha Loutongbam(idea, design and vision)
Android App : Ajinkya Potdar and Ankit Kumar
IOS : Khushal Bokadey and atul manwar
Backend API(Application Program Interface) : Neeti Birla
ORGANIZATION AND MANAGEMENT

Ola dont owe a single car. Every car that ola 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. 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 Ola 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 Ola cabs.
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 .
It have a dedicated customer care center 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.
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 Ola cabs traffic
heat-maps and pothole detection mechanisms.
It 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 utilization 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
utilization

BUSINESS IDEA

Olacabs aims to foster entrepreneurship among drivers and operators through

its aggregation business model making transportation economical and
efficient for customers in India.

The idea behind starting Ola was to capture 1.2 billion people as the Indias
rate of vehicle ownership is low to 41 per 1000 people and ranks 128th
worldwide .So to fulfill gap between Ola come into the picture as there is a
great opportunity for taxies to grow as 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.

Ola come with the idea of booking cabs through its app, website and even call
center .

With Facility:

Cashless payment : 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

BUSINESS STRATEGY

Cab booking Start-ups like OLA requires very low capital investment as they
don't buy cars. Private taxi owners also benefit by being able to access
aggregated consumer demand across different services like outstation travel,
local transfers and full day/half day rentals. Runs on a pay-for-performance
model. OLA charges a commission in whatever sales they make. Also to get
access to the technology platform, OLA charge taxi owners a small fee.

Ola takes 15% of every ride from driver they provide.

1. Percentage Commission from Trips being served through its platform

(Trip Based Commissions)
2. Ola Money Wallet
3. Corporate Tie Ups / Event Tie Ups
4. Vehicle On-Boarding Fee
5. In-Cab Advertisements
6. Fleet Leasing (To Drivers)
7. Car Type
8. Peak Time Charges

TRIP BASE COMMISSION

Ola deducts the Service Tax charged to consumer first, then its commission
percentage, then applicable income tax on the balance amount and remits
the rest of the amount to the drivers bank account at regular intervals (3-7
Days).

Assuming Travel Cost Per Minute: 5 INR (Travel time 40 mins)

Assuming Travel Cost per KM: 15 INR
Assuming Service Tax: 14.5%
Assuming Total Travel: 30 KM, (First 5 KM @ 100 INR)
Total Fare: 100+ 40*5 (Assumption 1) + 25*15 (Assumption 5 & 2) =
100+200+375 + = 675 + 14.5% of 675 (ST) = 675 + 98 = 773 INR
Ola's Commission: 675 * 20% = 135 INR + 98 (ST - Payable to Govt)
Driver's Payout: 773 - 135 - 98 = 540 INR Less 10% TDS (As per Income
Tax Act) = 486 INR

OLA MONEY WALLET

Ola Money wallet is a virtual wallet kind of a service which can make
payments at multiple vendor touch points including its own services of cab
booking payments. (it's somewhat similar to PayTM Wallet or Free Charge
Wallet etc.)

CORPORATE TIE UPS/ EVENT TIE UPS

Ola Sales Managers actually meet admin heads of organizations and convince
them to use Ola Cabs for their corporate in city travel requirements, No the
admins don't use the Ola App to book these rides, its done in a more
traditional way of calling or doing it via an API via a dashboard.

Rates are slashed down because of the larger demand from these corporates
but the volumes ensure sufficient cash flow to Ola from this business activity.

VEHICLE ON-BOARDING FEE

Ola May charge a slight fixed fee for the driver to become a part of Ola's
aggregation model.

IN-CAB ADVERTISEMENTS

Commuters may be offered Pamphlets or Live Streaming Ads from various

advertisers.

FLEET LEASING (TO DRIVERS)

Ola announced that it would buy cars and lease it out to drivers for a better
loyalty of drivers towards the brand to ward off those drivers who used to be
on both (Uber and Ola's) network. This may work like a fixed daily / weekly fee
to run the vehicle and the trip revenue going to the driver or a mix of fixed fee
+ trip based commissions.

How does Ola Make Money from Car type

Ola defines the type of Cars that it will call its Sedans, Compact Cars, and
SUVs etc. The Fixed per KM charges, Driver Waiting time and Per KM Travel
charges along with initial charges vary with the type of car chosen at the time
of booking.

How does Ola Make Money from Peak Time Charges

At certain times when demand for Cabs outruns that of the supply of the cabs
in the nearby locations, Ola may push the per km and other rate slabs per
type of cab higher so as to generate more revenue. The rest of the
calculations work in the exact same way as Trip Based Commissions.

The fare and other things go up in multiples like 1 to 4-5 anything.

PROMOTION STRATEGY

Following are the promotion strategy of OlaCabs:

1. Search Engine Marketing in google, yahoo, being

2. Provide festival discount. i.e. Festival marketing
3. Do advertisement in big event like (IPL, world cup)
4. Provide referral code
5. TV ADDS
6. Newspaper ADDS
7. Give OLA T-shirt
8. YouTube advertisement
9. Free Rides for New User

PRICING STARTEGY
Standard Fare
Categor Base Fare Distance Fare Wait Time Ride Cancellat
y Fare Time ion Fee
Fare
Lux 300 25 per km till 15 N/A 3 per 100
km min
30 per km after 15
km
Prime 50 10 per km till 15 N/A 1 per 75
Play km min
16 per km after 15
km
Prime 50 10 per km till 15 N/A 1 per 75
Sedan km min
16 per km after 15
km
Mini 50 8 per km till 15 km N/A 1 per 50
16 per km after 15 min
km
Prime 150 for first 4 17 per km N/A 1 per 100
SUV km min
Micro 40 6 per km till 15 km N/A 1 per 50
12 per km after 15 min
km
Auto Govt. Govt. determined Govt. N/A N/A
determined meter fare determined
meter fare meter fare
Share N/A N/A N/A N/A 25
Outstati N/A N/A N/A N/A 150
on
SWOT ANALYSIS

First mover advantage as a taxi aggregator in India

Top of the mind service
Acquisition of Taxi For Sure made it No. 1 in India
Strengt Huge customer base & due to network effect it is
h increasing
High awareness due to aggressive TV, online and
print media marketing
Rapid expansion and online application
Multiple rounds of VC investments have made the
brand financially strong

Drivers are the face of the company and hence their

Weakness misbehaviour directly affects the brand image
While the demand is huge, amount of cash burning
is huge and monetization is very difficult
 Unorganized market is huge (~90%) and hence
potential is high
Opportunitie Increasing internet penetration & smart phone users
s Rising disposable income
Shifting of consumers towards convenience creates
huge demand
Acquisition of smaller players
Rising competition
Ola has deep pocket and hence can burn cash
Threats heavily
Presence of many national players
Absence of clear government regulations in
developing countries
Future is unclear due to lack of regulations and
Customer loyalty is less in this industry

DEMOGRAPHIC ANALYSIS
PORTERS FIVE FORCES
RIVALRY AMONG THE COMPETITORS
The competition among the players in this market will be high and
rising.
e.g.: Meru cabs, tab cabs, uber etc.
Price is not a differentiating aspect of competition. People these
days look for comfort, luxury, availabity of the car etc.
Other than the fleet of vehicles the cost of the company has
increased on the tech products like mobile apps, websites and
also on call center services to attain competitive advantage.
Factors affecting the competitive rivalry are that there are few
players in the market, Government fixes the price, and there is a
strong of the same.

THREAT OF NEW ENTRANTS

The major threat to the new entrant is the initial investment, as
more Venture Capitalfirmss are investing in this industry the
company might get significant sum with can have advancement in
technology products innovation and a larger fleet of cars.
Economies of scale would be a significant factor, the reason being
as the industry is growing at a fast pace the economies which are
available to existing players will be reduced.
The profitability is also affected with entry of new players as this
industry has low loyal customers when it comes to luxurious
segment customers.
THREAT OF SUBSTITUTES
The biggest threat to the car rental service is the threat of
substitutes. The biggest substitute is the public transport. It
includes Local buses which have also provide luxury buses and
are cheap and comfortable, Rickshaws, local taxis etc.
Factors that differentiate Substitute with Car rental service are as
follows:
Price, availability of close competence in public transport, cheap,
easy availability.
With advancement in the technology the companies usually can
setup the meeting via video conference rather meeting in person.

BARGAINING POWER OF BUYERS

The leisure sector customer has very little or no power, the
corporate segment possess the significant upper hand in this
matter.
The switching is also low as there are not many loyal customers,
as the customers are travelers. Also there is no point in switching
to other in terms of price as the prices are fixed by theccompany.
The corporate buyers have a say in this as they frequently avail
the facility and can emphasize on reducing the cost for the
service. E.g of corporate buyers- big corporate houses, hotels.

BARGAINING POWER OF SUPPLIERS

The major suppliers in this industry are Car dealers, fuel, skilled
drivers, technology products.
Car Dealers have low bargaining because there are many car
dealers in the market so to attract the loyalty of the business they
offer low price, high end model etc.
Fuel suppliers have low to moderate bargaining power as there
are quite a few suppliers in the market and also they cannot
regulate the prices as this are regulated by the government. Also
the Government is emphasizing in the use of CNG as it is cheaper
and cleaner.
Skilled drivers have a high bargaining power as they are on the
rise, also there is unionization involved which overpower the
business.
Technology also has low bargaining power as the suppliers of the
electronic meters, GPS navigation device, GIS navigation,
television and also call center services are in large numbers.
MARKET MIX

PRODUCT
Ola offers different types of cab service that have a diversified range from
luxury to economic like

Ola Mini : An economic-class car service to serve customers looking for

affordable personal transportation with cars like Tata Indica

Ola Sedan : A regular-class car service aimed at providing the customers a

spacious car for comfortable travel with cars like Toyota Etios.

Ola Prime : A business-class car service for luxury travel available in a few
cities offering bigger cars like Toyota Innova

Ola Pink : A car service driven by a lady driver service lady travelers.

Ola Outstation : In order to strengthen its bus-shuttle service, Ola

acquired a trip-planning-applications company titled Geotag. At its onset, it
offered rides in cities but recently has started offering outstation rides to
nearby cities also.

Ola auto : An auto service provided to the customers, removing the need
for haggling the price with the drivers

PLACE
Ola Cabs is a company dealing via an online network. Cabs can be
easily reserved through its own website and via Ola mobile app.
The company started its operations from metro city Mumbai in
Maharashtra but later shifted its base to Bengaluru in Karnataka.
By the year 2014, it had extended its network to include nearly 200,000
cars that were running in nearly one hundred two tier, three tier and
metro cities like Kolkata, New Delhi, Chennai, Pune, Bhubaneswar,
Bengaluru, Hyderabad, Ahmedabad and Mumbai. Ola Cabs has
extended its operations to include auto services and it started from
Bangalore and expanded to include places like Kolkata, Hyderabad,
Chennai, Pune, Delhi, Visakhapatnam, Guwahati, Jaipur, Indore and
Chandigarh.

PRICE
 Ola cabs supported payment via Paytm only but later it included options
for both cash and cashless via Paytm.
Ola Cabs offer rides in a comfortable setting with furnished and air-
conditioned cabs.
It offers to price flexibility with its range of vehicles that includes
economic-range, mid-range and high-range.
Ola Cabs has adopted a penetration policy and has kept its price range
reasonable so as to gain a competitive advantage over rival companies.
It has also adopted a promotional policy and offers incentives to
increase its customer base.

PROMOTION
Adopted an extensive marketing policy to create high and
positive brand awareness amongst consumers.
The company has taken help of every available medium like digital and
print via SMS on mobiles, magazines, newspapers and billboards.
Social media platforms to garner maximum coverage via Twitter,
Facebook, Blogs and Instagram.
Actress Gul Panag has been associated with Ola for brand promotion
and at a promotional event handed over keys of Ola cab to its driver.
It offers incentives like free rides, 50% discounted rides, rupees 5o off,
first ride free for new members and promo codes to increase its
customer base.

VALUE PROPOSITIONS

At the heart of the business is the value proposition that says

We will always give you a ride when you need it

and for drivers

We will always give you passengers when you want them

Olas value proposition is like a market but if it were that simple it would
not have the same disruptive effect. What enables it to deliver on the
promise above is that it is able to match supply to demand.
By using real time metrics it is able to see what demand is like and then
as demand starts to exceed available capacity to reduce demand by
introducing surge pricing which increases prices where demand is
highest. At the same time the increased fares encourage more drivers
to work and thus increases supply.
The technology enables this value proposition and at the same time it
also enables traditional pain points to be addressed at minimal
additional cost. If you have no cash its not a problem. Ola charges your
 card. In fact the whole system is cashless making it safer for both
drivers and passengers.
It also brings transparency by identifying both driver and passenger and
their positions to each other and by showing exactly where the taxi is
at all times. Uncertainty and thus anxiety is reduced for both.

S.NO DRIVER
CUSTOMERS
1. No need to wait for a taxi for
long times.
UNIQUE STRATEGIES BY OLACABS 2. Free rides on certain
OlaCabs provided a lot of promo codes on occasions and discounts
their website to give huge discounts in from time to time.
various segments. 3. Prices lesser than the
They started the trends of providing fixed normal taxi fares.
rate drops to the airport when they launch 4. Fixed prices for common
in a city places like Airport etc.
5. Exclusive ride at an
OlaCabs provides cabs at INR 13 per
affordable price
kilometre whenever Auto Unions call a 6. Conveniencecomes at the
strike doorstep
7. On demand availability
8. Certaintywill get a ride for
sure
9. ETATrack the cab while it
arrives.
MAPPING OF PRODUCT
10. Cashless ride
S.NO
Different types of services provided by OlaCabs :
1. Additional source
of income.
2. Flexible working
OlaCabs schedules. Can
Ola Prime A business-class car service for luxury travel available
work partin a few
time or
cities offering bigger cars like Toyota Innova.
simply whenever
Ola Sedan A regular-class car service aimed at providing the customers a
spacious car for comfortable travel with cars likethey
Toyotalike.
Etios.
Ola Mini 3. Easy
An economic-class car service to serve customers looking payment
for
procedure
affordable personal transportation with cars like Tata Indica.
Ola Pink A car service driven by a lady driver service 4.
ladyThose who love to
travellers
Ola Auto An auto service provided to the customers, removingdrive canneed
the earnfor
haggling the price with the drivers. money while
pursuing their
hobby
5. Ola pays drivers
to be online, even
if they dont get
any request.
FUNDING

Funding Partners

Ola Cabs raised $330k in its initial round of funding on April 21, 2011.

Series A Funding: The company received funding of $5 million from Tiger

Global Management.

Series B funding: The company received funding of $ 20 million from Matrix

Partners and Tiger Global.

Series C funding: $41.5 million from Stead view Capital, Sequoia Capital
and its existing investors.

Series D funding: On Oct 25, 2014, it raised $210 million from Soft Bank
Internet and Media Inc. and its existing investors.

Series E Funding : Its institutional funding, it is back in the market to scoop

between $300-500 million more.

2015: Russian billionaire Yuri Milners DST Global and Singapores GIC has
proposed to fund around 2500 crore Rs on 20th March 2015 Management Ola
cabs.

FINANCIAL STATUS

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.

In terms of revenue, Ola Cabs backed by private equity funds Tiger Global and
Matrix Partners. 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.

For 2014-15 : ANI Technologies Pvt Ltd, which operates Ola, posted a seven-
fold rise in revenue from operations to Rs 380.2 crore for the year ended 31
March 2015 from Rs 49.6 crore in FY14.
 But total expenditure climbed at twice that pace14 timesto Rs 1,173
crore, due largely to a 19-fold rise in the companys fleet operator costs
to Rs 905 crore. This widened its net loss to Rs 754.8 crore from Rs 34.2
crore in the previous year.

For the period ended 31 Mar 2015, the company reported revenues of
INR 418 cr and profit after tax of INR -755 cr. As on 31 Mar 2015, the net
worth of the company stood at INR 3,486 cr.

COMPETITOR ANALYSIS

Features OlaCabs Taxiforsure Uber

Started in 2010 2011 2013
Android App YES (2012) YES (2013) YES (2013)
IOS App YES (2012) YES (2013) YES (2013)
Windows App YES (2014) YES (2014) NO

BIBLIOGRAPHY

OLA CAB BUSINESS STRATEGY. (n.d.). Retrieved from www.ciim.in.

OLA cab company Profile . (n.d.). Retrieved from www.owler.com.

ola cabs. (n.d.). Retrieved from www.olacabs.in.

OlaCabs SWOT Analysis, USP & Competitors. (n.d.). Retrieved from

www.mbaskool.com.

SDMRCMS. (2015). Ole ole OLA. Case in management volume 4.