On-demand taxi network Olacabs just announced its biggest ramp-up to date. Today it launches a business-class product called Ola Prime in six Indian cities – Bangalore, Delhi, Mumbai, Chennai, Pune, and Jaipur. In terms of cars and price, Ola Prime seems to be targeted directly at Uber.
Today Ola also expanded its existing – and cheaper – Mini service to Mumbai, Chennai, and Pune. Its mid-range sedans were already running in 12 cities before this. This is quick growth from a three-year-old startup.
Its competitors like Uber, TaxiForSure, and MeruCabs have been growing rapidly too, as the on-demand taxi market is just taking off in India. Though unorganized taxi services are still the norm on the streets, the number of on-demand taxis plying Indian roads saw a ten-fold increase between 2009 and 2013, according to TechSci Research. Their revenue is expected to grow at a rate of 25 percent between 2014 and 2019.
Institutional investors are pumping in money to fuel this growth. Olacabs bagged US$40 million from Sequoia Capital and Hong Kong’s Steadview Capital in July, a few months after a US$20 million earlier funding round. Last week, TaxiForSure raised about US$30 million from Accel Partners, Bessemer Venture Partners, and Helion Venture Partners with an ambitious aim to reach 30 cities in a year’s time. A year-old in India, Uber too is adding more cities to its roster.
Founded by IIT Bombay alumni Bhavish Aggarwal and Ankit Bhati in January 2011, Ola currently has around 18,000 cabs on call across three categories: Sedan, Mini, and Prime. In a statement announcing its entry into new cities, Pranay Jivrajka, vice-president of operations at Olacabs, says:
We have arrived at these offerings based on our understanding of travel patterns in these cities over the years and the results derived from our analytics exercise that brought to light the price points which different customers will find attractive.
With companies ramping up operations, the battle of cabs in India looks likely to get hotter. For customers, it just means a lot more and better choices.
Editing by Steven Millward
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