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best Ola business model

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OLA Business model 

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Today we’ll disucss about ola and uber business model.

I know you already know about them

What do they do? they have a taxi business

Ola is our indian based startup

and uber is international

So i’ll talk about ola more

and less in uber because we are indians

And our audience is india centeric

See if i want to start my taxi business

Most important thing i need is taxi and a driver

and from where do i get the money?

If i invest money in buying taxi in the inital stage

Ola says that they have around 5 lakh registered driver

Now it means

5 lakh taxis , how did they do this investment?

They came with a model that

You need to have a driver and a car

and we’ll give you commission

and you need to give us some percentage of the revenue

This seems interesting

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We get to know that on some rides

If we drive 12 hours then this much money

this much incentive.

and can earn around 1 lakh.

Drivers got fascinated by this

and some who were wise

CA people

What did they do? they put their own cars and hired an employee

On EMI

EMi of around 10,000

and hired an employee in 20,000

and he’ll get 5000 incentive.

and used to track their employees , this lead to a network of 10-15 cars

and they earned thousands and lakhs from this

Everything was going fine till now

For drivers, this thing is good

But ola uber give us discount coupons

and first ride freea

and 6rs/km

Cheaper than auto

How were they paying for this?

Basically they were in loss.

In the last financial year 2015, they beared the loss of 2300 crore.

I’ll tell you in more details.

About their profit and loss.

Salaries amount was around 381 crore.

and advertising cost 437crore

and cost on tech was 120 crore.

What about the other expenses?

SO they tried to analyse this

In this financial year, they increased the percentage of incentives.

Now 5 lakh people are linked with them

That EMI trap

What happened here

People who used to earn 1 lakh, now they earn 35000

32000

If they want to earn 1 lakh then they have to work for 24 hours.

Which is not possible.

What happened here, they hired their own drivers

their own cabs.

And they just need to give them commision

and they’ll earn profit.

In this financial year, we’ll get all the details of their profit and loss

growth ola

According to me

Their loss margin has decreased

In the initial stages

People used to prefer auto than cabs

And before auto ,people prefer auto

Then metro came

If you are getting a cab in 6rs

and 3 people can easily seat in a cab

Why wouldn’t people use cabs?

Now when people are tilted towards cabs

One thing Economies of scale

THere was a person who used to take 10 rounds of driving

10 hours

and now he has work of 16 hours, so here he can earn more

So ola and uber

Brought a revolution where they tried to let people switch from auto to cab

So according to me

This is a very profitable business model

In starting they did bear the loss of 2300 crore.

it’s a big loss and their valuation

Decreased after they asked for funding.

Why did it happen? because of the loss

Now you’ll see it’s valuation will increase.

Because it’s loss is less.

Now let’s talk about some strategic decision

Means they acquired some startup

First they did in 2015

Taxiforsure

Taxiforsure had a good marketing image

They acquired them

and people get to know about ola and uber.

taxi for sure

That was the time when ola and uber was highlighted in the eyes of people

Because they bought taxiforsure

and in the same year

They bought the jio tag also

Basically it’s computer system

No. of km and total amount

All the software system was designed by jio tag

GPS tracking and everything

So they are getting ROI from the money they invested in 2015

JIO spent 2 lakh crore

On the spectrum but

They’ll get the ROI from now

__________________ Gauhar ALI

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