Smart move: Why Ola is building bridges with the traditional black-and-yellow taxis in Mumbai

Taxi rides in most cities, from New York to Bangalore, were nightmarish until disruptors like Uber, Lyft, and GrabTaxi arrived with their taxi-hailing apps to give users better options. Users were hungry for choice and were quick to embrace them. But traditional taxi services in different cities worldwide have been at loggerheads with the tech-savvy newcomers.

One exception is in Mumbai, financial capital of India, where the roads are chock-a-block with black-and-yellow traditional taxis, simply called “Kaali-peeli” (black-and-yellow). They are still mostly the ancient Fiat Premier Padminis, Maruti’s rickety Omni vans, and an odd Ambassador – a Morris Minor lookalike. But now, thousands of them are sporting a cool new smartphone on the dashboard.

In a first-of-its-kind move, taxi app Ola has on-boarded Kaali-peelis to its cab network. Ola app users in Mumbai can book a Kaali-peeli just as they would do for an Ola cab, and through the same app, without needing to flag them down in the frenetic Mumbai traffic. At the end of the ride, the user pays up according to the taxi fare meter and not through the Ola app, which only facilitates hailing a traditional cab in the vicinity.

Ola claims to have registered over 2,000 Kaali-Peelis in South Mumbai already. It gave those drivers a smartphone, and trained them how to use the Ola app to accept booking requests and find their way to the customer.

An Ola app user is able to see all the Kaali-peelis in her vicinity. She can then choose between a Kaali-peeli and the more expensive Ola options – mini, sedan, and prime.

Three birds with one stone

This is a smart move by Ola. For one, in Mumbai people are used to hopping in and out of the Kaali-peelis to navigate the crowded city. These cabs are a part of the city’s cultural landscape. No Bollywood movie set in Mumbai is complete without shots of Kaali-peelis on the streets. Though not a very comfortable ride, they are seen by many as the easy, inexpensive, and convenient option.

This move tackles another challenge Ola and its rivals face: sign up enough drivers to respond to customer calls anytime, anywhere. Right now the demand-supply gap is so huge that requests have to be rejected in peak hours. So, by on-boarding Kaali-peelis, Ola gives its users a wider option, signs up thousands of new drivers, and scores brownie points with the traditional taxi industry as well. Plus, it gives taxi users another reason to download the Ola app to their smartphones.

“We are confident that our technology will, at one end, make the booking process extremely convenient for the customers and at the other end, help Kaali-peeli drivers get access to more customers,” says Anand Subramanian, director of marketing for Olacabs. Ola claims that the additional rides via its app will make a considerable difference to the driver’s daily revenues – “up to 40 percent in current scale of operations.”

The plan is to bring over 20,000 Kaali-peelis on the Ola mobile platform by the end of this year.

Founded in 2011 by IIT Bombay alumni Bhavish Aggarwal and Ankit Bhati, Olacabs has over 30,000 cars available across 19 Indian cities. It raised US$40 million in funding from Steadview Capital and Sequoia Capital besides existing investors Tiger Global and Matrix Partners in July.

It closed a US$20 million round last November.