India’s largest taxi-hailing company Ola will lay off 500 people as it cut costs to fend off global rival Uber. The layoffs will affect contract staff and roles that have become redundant. Ola shut the TaxiForSure business in the first week of August, laying off 700 people in the company it had acquired last year for $200 million.
“These were organisational decisions, keeping in mind the interests of employees and business efficiencies,” an Ola spokesperson said.
The company is, however, hiring new staff for its technology team. “We continue to hire across the country with over 300 open positions,” the spokesperson added.
TOUGH TERRAIN FOR TAXI AGGREGATOR
Ola is laying off around 500 employees to save cash and streamline its business
Company says the layoffs are part of its annual churn of 3-4 per cent manpower
Last month, Ola laid off around 700 employees and shut TaxiForSure, a subsidiary
Ola says it is still hiring over 300 people to add to its team of 6,000
Uber has become more aggressive in India after losing to Didi Chuxing in China
Ola’s is streamlining operations when Uber has shifted its focus to India. Uber does not want to repeat the mistakes it made in China that forced it to sell out to local rival Didi Chuxing after burning $2 billion.
Uber and Ola are trying to capture the biggest chunk of India’s taxi-hailing market that is expected to grow to $1.7 billion (Rs 11,400 crore) in gross booking value in 2016. Uber has a fleet of 350,000 taxis, lagging behind Ola’s 450,000 cabs and 100,000 yellow-and-black taxis and autorickshaws.
Uber has kicked off a price war in India after raising $ 3.5 billion this year from Saudi Arabia’s Public Investment Fund.
Last year, it committed to spend $1 billion in the country. Ola has raised over $900 million in funding since 2015. A planned $1 billion in fresh funding has not materialised.
Ola’s losses were Rs 796 crore on revenue of Rs 421 crore in 2014-15, according to its last disclosure to the ministry of corporate affairs. Uber has not disclosed its India numbers so far.
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First Published: Sat, September 03 2016. 00:57 IST