Ola is laying the groundwork to launch operations in the UK soon, two people familiar with the expansion plans told The Ken. The company plans to set up shop in Manchester first and then expand to other parts of the country. London is on the list, but it all depends on getting a license in the capital. A timeline has not been set yet. Ola recently hired Chandra Nath, who was flown in from Palo Alto to anchor all expansion plans.
The UK is a huge market for ride-hailing companies. According to a 2017 Goldman Sachs report, the taxi and limousine market in the UK is valued at $11.52 billion. Uber, despite hitting speed bumps in London, has managed to double its revenues in the country. And that’s why Ola wants the UK market. It will start with Manchester as it has a huge Indian diaspora which Ola will leverage to get its first set of customers and drivers.
Armed with the $1.1 billion raised from Tencent, among others, Ola has been aggressively trying to expand its operations over the last six months. And this is not the Bengaluru-based ride-hailing unicorn’s first attempt at exploring an international market. A few months ago, Ola announced that it would be expanding to Australia. It has already made a botched attempt to wade into Bangladesh and Sri Lanka.
On the face of it, it appears that the company wants to increase its number of rides so it can appear as big as Uber, even outside India. Currently, Ola does about 1.6 million rides a day, compared to Uber’s 1.2 million in India. The company has been consistently pulling ahead, aided primarily by its introduction of autos not too long ago. It had started Ola autos in 2016 (and then relaunched it in 2017) as a move to pacify the local transport unions, but it turned into a volume churner for Ola. The company doesn’t burn too much when it comes to autos either, the drivers work on very little commission. So, that’s it? Is this why Ola wants to go international? Not really, there seems to be more to it.
Currently, all discussions within Ola centre around how the company will react when, and not if, the Ola-Uber merger finally goes through. But Bhavish Aggarwal is mindful of the chance that it may all come crashing down.
And going international is Ola’s insurance policy.