[ChiragM]

According to a media report, ride-hailing service Ola has started making a profit on every ride. However, the company is still reporting an operating loss that stood at Rs. 3,731 crores in FY17.

Ola has announced that it is now ENTR positive. ENTR stands for Effective Net Take Rate. It is the net commission the ride-hailing service gets after taking away costs like discounts offered per ride. The driver incentives offered by Ola has also been reduced. They now vary from 15-20%.



However, profitability will not be easy to achieve for Ola. While financials for FY2018 are not available, Ola expects an operating loss of Rs. 1,235 crores for the financial year ending March 2019. For the year ending March 2020, the company expects to see a profit of Rs. 746 crores.

Along with reducing driver incentives and customer discounts, Ola is also pushing its subscription plans like Select and Share Pass and entertainment service Ola Play. The company claims that they have not sacrificed growth or given up market share to main rival Uber.



Source: Economic Times

Link to Team-BHP news

[deehunk]

Originally Posted by ChiragM

The driver incentives offered by Ola has also been reduced. They now vary from 15-20%.

Attachment 1781725

Along with reducing driver incentives and customer discounts, Ola is also pushing its subscription plans like Select and Share Pass and entertainment service Ola Play.

The number of drivers operating for Ola has reduced in the last few months, there are no discounts offered to customers, their claim is false. The pricing has gone weird during evening, a ride for 16kms costs you Rs.500-600 in a micro segment. It is not easy for them to come out of the debts.

[gk1234]

Another oft-heard complaint of Ola drivers is that unlike Uber, which has a good record of keeping its word and ensuring prompt payment to its drivers on a weekly basis, Ola is notorious for withholding the dues to its drivers. Forget weekly payments, these guys are sometimes outright denied their bonuses for no reason even after being promised of the same. Perhaps that’s how Ola has turned profitable.
At least here in Cochin, Uber is the first preference between the two brands, and add to the mix the availability of Uber Eats, seems like Ola has its work cut out to remain relevant here. So yeah, profit or otherwise, it has to earn the trust of its customers and drivers alike to remain in the green.

[aniyo]

I like the concept of app based taxis. I feel government should step in to control the prices and the so called offers these companies give to ensure there is a healthy competition and not create a price war.
Government should have a structure for these taxis to ensure their cost of doing business is lowered helping them to make profit. We desperately need a robust public transport in all our metros, and we will not have one till it is profitable in the medium and long term.
If we leave it to them either we will have a cartel or a price war like telcos and it is we the customers who will have to suffer bad service.

[johannskaria]

While we're at the nascent stages of shared mobility here are few of my observations:-

1. The fares have gone much higher than the initial offering that these days I find them way too expensive to hail one of these app cabs. Hence I've gone back to owning a car as the economics are much cheaper.

2. The Ola owners are not making money enough to make it a sustainable business model. They're just in the black, but not enough. In fact, I was surprised by the number of Ola/Uber repossessed cars up for auctions at Shriram auctions in Cochin last time I visited.

3. The government's move to provide subsidies only to these companies for electric mobility plan is a flawed idea. Since these companies will not pass on the benefits of lower costs to the consumers as lower fares. And the government will be providing subsidies to foreign companies with Indian management and ignoring the small Indian owned businesses.

4. With being an asset-light services company it's not hard to show that you're in the black. But in my humble opinion, if the most important stakeholders, the drivers and the riders are not happy in the long-term it means nothing. As the novelty wears off everyone is in for more troubles.

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[GTO]

Fares might be higher than the earlier days, but they are still dirt cheap. The current prices (except for during peak hour spikes) are simply unsustainable. If you include the cost of fuel, car depreciation, wear & tear, insurance, driver earnings, Uber / Ola commissions, paying 120 bucks for a ~5 km ride is simply unrealistic. A regular black & yellow costs 80 bucks for the same journey, and that's in a rickety non-airconditioned vehicle with a driver living barely above the poverty line.

Right now, all of us customers are enjoying on VC money. But the party is going to end sometime and prices are going to climb up. That's when the Ubers & Olas of the world will become truly profitable.