Why Is The OLA Business In India Failing?

Have you ever noticed that the cost of Ola goes up like crazy? Or the fact that these taxis are no longer available? Even the company has let go of many of its staff recently. However, Ola is going through its worst time ever, and the Pandemic has worsened. Even though it’s over, Ola’s business plan still has a big problem.

The income has dropped by 100, and none of the owners is making any money. In this blog, we’ll talk about everything! We’ll explain why Ola is in such a bad place in India, how the trouble started, and where the drivers are going. But before discussing this, we’d like to discuss Ola’s past.

Ola Explained:

Ola is an Indian global ride-sharing company with its main office in Bangalore. ANI Technologies own it. It was started in 2010 by Ankit Bhati and Bhavish Agarwal, who had graduated from IIT. Ola lets people book taxis online to get where they want to go. It also lets people rent taxis and gives them other services.

Ola serves more than 250 cities and towns in India right now. Aside from that, it now has customers in New Zealand, Australia, and the United Kingdom. It is designed for people between 20 and 45 because they are young, go to work, school, etc.

Before, they didn’t have a mobile app like this for making reservations. They used to do business directly with customers through call centres. But when everyone in India started using the Internet, they changed how they did business and began offering online cab services in 2015.

Now that we’ve talked enough about the company that once caused a stir in the transportation world, we need to know why it failed. Talking about India in particular, Ola’s business plan is utterly failing!

Why is Ola’s business failing in India?

OLA has recently fired more than 1,400 people. The money coming in has dropped to the ground. Since the pandemic, OLA has lost between 30,000 and 35,000 taxis. Ola has cut its drivers’ incentives and even their pay. Even the people who work there are going. We’ll try to figure out what’s going on by starting with Ola’s business plan, which comprises four steps.

OLA’s business strategy:

It’s made up of four steps Ola took before getting in trouble. It’s important to remember that OLA has passed all of them since it started.

Draining money:

During this time, the company spent a lot of money.OLA was just like everyone else and took the same road. To get the partners, it burned through hundreds of crores of rupees. Not only did they perform this, but they treated customers and workers the same way. They got people to use Ola by giving big deals that made rides quite cheap. In the same way, they gave Ola drivers a lot of rewards. Their pay used to be between $70,000 and $80,000 per month.

Building Trust:

Then comes the time to show that you are a trusted business. Ola did the same thing and didn’t leave anything out. Because they earned outside workers’ trust, many quit their jobs to work for them and make a lot of money. People who didn’t have much money quit their jobs, got loans, and bought cars to become cab drivers.

They saw it as a great chance and just took it. When it comes to customers, they got used to these cabs and chose them as the best way to get anywhere, anytime. Even though the company grew quickly initially, it was at the cost of their own money.


Then comes the part that is serious by itself. Dependency opens the door to power, which is exactly what happened here. Now that the Ola company has won, they can do whatever they want with it. They started taking away the reward they had given the drivers at first. Surcharges on rides made the situation even worse.


There, it was clear that this stage was about to start. The people who leave their jobs to become taxi drivers so they can make more money are now stuck with the company. They have to repay the loan before they are allowed to depart the business for five years.

So, there is no way to change jobs. They started taking taxis instead of having a car, then forgot about it. They decided it was the best choice when they got their money back. Then they got Ola passes and started using them every day.

When did the trouble start?

But the last step wasn’t just difficult for drivers and users; it was the start of Ola’s failure in India. When drivers started making between 70k and 80k rupees per month, they started moving toward a better way of life. But all of a sudden, the control phase made everything worse. Their pay dropped by half. Now, they only make between $30,000 and $35,000 per month.

The benefits made it to the ground, and gas prices increased significantly. Salaries went down a lot because there were more drivers than before. Drivers couldn’t take it anymore, so they began to fight against the company. They went into the streets to show how angry they were. The virus hit the country very hard, which only made things worse.

What happened?

  • During the outbreak, many cab drivers lost their funds. But they needed to do something, so they returned to their towns to look for work. Due to people not making payments, thousands of cars were taken away. To be exact, because of these failures, 35,000 cars were taken by 30k banks.
  • Then, people who couldn’t get car loans got them from people who lent money for cars. In exchange, they shared the money they made with these loans.
  • People are afraid because of how hard the Ola drivers had to work, how their pay was cut, and how the protests followed. The taxi business was hurt, and people stopped wanting to become taxi drivers.

What are taxi drivers doing now?

You’re probably thinking about what the cars are doing right now. Who did they find to save them after they quit driving taxis? Most are becoming delivery boys for apps like Dunzo, Zepto, Swiggy, and others. This is clear since they won’t have to think about money anymore, even if it’s not much.

  • Paying $40,000 a year to pass the RTO.
  • Don’t have to pay 6,000rs for upkeep every two months.
  • If they don’t work, they only have to pay a small amount for EMI. If they do work, they must pay a large amount for EMI.

Furthermore, if they find better employment in the future, they may quickly transfer, which was not feasible in the driver’s situation.

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About the Author: Mahammad Sakil Ansari

The owner and lead editor of BEPINKU.COM. Learned Digital Marketing at IIT Kharagpur. He holds bachelor's and master’s degrees in English from Vidyasagar University and Rabindra Bharati University, respectively. He's also known as one of India's top website designers, enjoys biking, and has a passion for music.

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