A startup often has a number of goals when it first sets out on its journey; these goals serve to orient its actions and determine its course. Startups frequently seek to solve a particular issue or market difficulty. They seek to provide novel solutions that add value for consumers by identifying gaps or inefficiencies. Startups concentrate on creating their main offering. They seek to develop a prototype or minimum viable product (MVP) that shows the viability and worth of their service.
They want to confirm their product-market fit. To make sure that their product satisfies the requirements and expectations of the target market, they carry out market research, collect input from potential consumers, and refine it. Building a user base for their product or service is a goal of startups.
OLA also followed the same objectives to gain popularity in the market. At first their focus was to create a market presence and to let the others know about their service. They wanted to reach as many people as possible. From a modest travel agency called Olatrip.com to one of the two competitors in India's cab-hailing sector in a state of virtual duopoly, Ola has come a long way. At the time of its latest investment round in December 2021, Ola was valued at $7.3 billion.
A Difficult Promise to Keep
Since the incentives were so good in 2017–18, many people left their secure jobs to work as drivers for Ola, but when the pandemic hit, their situation was dire. They had to pay hospital bills, keep up with expenses even when there weren't any rides during the lockdown, Ola failed to give them any stable income, and they were forced to move back to their hometowns to find work.
In the beginning the company was giving a good paycheck to the drivers who were employed with OLA. They earned up to eighty thousand to one lakh rupees and the company also charged less for the ride fares from the customers. For this reason OlA gained a lot of popularity among the people of India. They found it cheap and accessible at any time and any place and people forgot the concept of using private cars for transport. In the beginning the company did not focus on its profit margin but more on its sales and recognition.
But the company faced a major challenge when the pandemic occurred. It wasn't simply a pandemic that affected Ola cabs; the firm also decreased the incentives it offered to drivers in an effort to increase profits. However, there is now very little left for the drivers, and as a result, many of them have quit the business.
In contrast to Uber, sources claim that Ola's calculations and income sharing with the drivers are unclear. Its top line decreased by more than 60% in FY21 as a result of all these factors.
Bhavish Agarwal and his Ambition
The CEO of the firm is the first area of concern. Close sources claim that Bhavish is aggressive and ambitious. The company has spent money on ventures into other unrelated industries, including Ola money, Ola cars, Ola foods, etc.
The firm opened Ola Cafe in 2015, but it was shut down after a year or two. In 2017, it bought a 95% share in Foodpanda for Rs. 200 crore, and it put an additional Rs. 1200 crore in it. Foodpanda then purchased Holachef, and both businesses were shut down in 2019.
When everyone was going crazy about the grocery delivery industry in December 2021, it also jumped on board and introduced Ola Dash. However, the firm quickly realised it wasn't as simple as they expected, so they scaled it down and let over 2000 employees go.
Then emerged Ola Cars, a marketplace for purchasing and selling used automobiles. Customers complained about the product's excessive costs, poor card quality, and other problems, despite the company's vigorous marketing efforts. Recently, they announced plans to end business in a few cities.
According to reports, the company's desire to dominate every industry has contributed to its collapse. Bhavish searches for business opportunities but lacks the skills to seize them. The turnover in the company's senior management speaks volumes about how bad his attitude is both for the business and for the entire organisation. A number of senior executives have left the company because of his behaviour.
A corporation is most definitely not a one man show; nonetheless, Bhavish Aggrawal seems to have a difficult time embracing that fact. People in the highest positions form the foundation of any organisation.
Road Map Ahead
The recently spun-off Ola Electric, which was once a fully-owned subsidiary of ANI Technologies (Ola's parent company), commanded a valuation of $5 billion at its previous funding round.
Currently, Ola just has its fin-tech company, two-wheeler EV manufacturing business, and cab-hailing business. To strengthen its financial business, it recently purchased Avail financial, which is controlled by Bhavish Aggarwal, brother.
ANI Technologies does own a portion of Ola Electric in exchange for the right to use the Ola Electric brand, but it is a distinct company with the same founder, Bhavish Aggarwal. Ola Electric has quickly expanded, displacing a number of well-known EV businesses with a lengthy history in the industry. It started operating at an ideal moment, as rising fuel costs and environmental awareness encouraged users to consider alternatives to conventional automobiles.