1. ASSIGNMENT ON
OLA CAB ACQUIRES
TAXI FOR SURE
By- Sankalp Katiyar Submitted to- Dr .V N. Bajpai
Section-B
PGDM -2014-2016

2. OlaCabs, popularly known as ola, is a mobile app for personal transportation in India. Ola
started as an online cab aggregator in Mumbai, now based out of Bangalore and is among the
fastest growing businesses in India
It was founded on 3 December 2010 by Bhavish Aggarwal (currently CEO) and Ankit Bhati. By
2014, the company has expanded to a network of more than 200,000 cars across 85 cities. In
November 2014, Ola expanded to incorporate autos on-trial basis in Bengaluru. Post the trial
phase, Ola Auto expanded to other cities like Delhi, Pune and Chennai starting December 2014.
value of ola as on September 2015 is $5 billion
Service
Ola provides different types of cab service ranging from economic to luxury travel.The cabs are
reserved through a web browser or a mobile app. This cab service supports both cash and
cashless payment options with Ola money. It claims to clock an average of more than 150,000
bookings per day and commands 60 percent of the market share in India.
Funding
It raised $330k in its initial round of funding on April 21, 2011. The company received Series A
funding of $5 million from Tiger Global Management; Series B funding of USD 20 million
from Matrix Partners and Tiger Global; Series C funding of $41.5 million from Steadview
Capital, Sequoia Capital and its existing investors. In Series D round of funding on Oct 25, 2014,
it raised $210 million from SoftBank Internet and Media Inc. and its existing investors.Despite
failing to break even in 5 years, Ola Cabs managed to attract new investment on the back of
expanding topline and balance sheet.
Acquisitions
OlaCabs bought TaxiForSure or TFS on 1 March 2015, for about $200 million. From the 25th of
June 2015, Ola users have gained access to TFS cabs via the Ola mobile application.

3. Employee Relations
Ola Cabs has tied up with Avanti Learning Centres for a good cause. The drivers who are
associated with Ola can get their children studying in the ninth and tenth standard to the learning
centre and avail free education.
Ola Gurukul will start off with a batch of 500 students in Mumbai. The initiative will be
extended to provide free stationary, books and other apparatus for the top performing students.
The student’s program will be held after school so that the students get the much needed
attention while also saving on tuition classes costs.
Criticism
Technology
OlaCabs' technology came under criticism regarding the security of its mobile app. The API calls
could be replayed to top up its wallet
In August 2015, a privacy breach had occurred when intended customers' details such as names,
phone numbers and addresses, in Bengaluru, were received as SMS messages by an individual in
Chennai. Although these unanticipated messages were reported to Ola, the company had chosen
to ignore them, even under the threat of being reported to the TRAI. The issue was reportedly
fixed three weeks later after receiving considerable media coverage and social media attention.
Over billing and transparency in billing
The refund policy of OlaCabs has been criticised because of billing errors caused by technical
glitches in their system. Hackers have claimed that they have been able to hack OlaCabs system
and access customer data including credit card/debit card information. OlaCabs have
categorically denied that their system was hacked.
Driver Credibility
The Delhi Transport authority in early 2015 questioned the credibility and required verification
of drivers plying Ola cabs, along with other competitors like Uber and TaxiForSure. The inquiry
has revealed that approximately 80% of drivers amongst all services did not possess permits to
ply commercial transport services in Delhi.

4. TaxiForSure.com is a taxi aggregator company based in Bangalore, India. It provides facility to
book a cab through calling, through their website or through their mobile application.
History
Taxiforsure.com is run by Serendipity Infolabs, which was started in June 2011 by two graduates
from NIT Suratkal and IIM Ahmedabad, Aprameya Radhakrishna and Raghunandan G. The
company started providing its services in Bangalore in 2011 and expanded
to Chennai and Delhi in 2013 after generating a positive revenue in Bangalore. In 2013, the
company launched its mobile application for iOS and Android platforms and also allowed the
booking of cabs through Twitter. It tied up with Goibibo in October, 2013 to offer airport
services to its customers in Bangalore and Delhi. The company soon expanded its operations
toAhmedabad, Hyderabad, Baroda, Surat, Pune, Mysore, Udaipur and Rajkot in 2014. It also
provides the option to hire luxury vehicles. Recently, TFS has also started providing auto-
rickshaws on call through their app.
Ola acquired TaxiForSure for $200 million in a cash and equity deal on 2 March 2015.The
founders assumed an advisory role after the acquisition to help in the transition and left the
company on 16th April 2015.The company continues to operate as a separate entity with the
CEO Arvind Singhal heading the company.
Funding
TaxiForSure.com received initial funding from Accel Partners India, Helion Venture
Partners and Blume Ventures in 2012. The company secured its series A funding from the same
group of investors in 2013 taking the total funding to USD 5 million approximately. In 2014, the
company received series B funding of USD 10 million led by Bessemer Venture Partners.
Existing investors also participated in this. The company raised further 30 million from Accel
Partners US on August 21, 2014.

5. Reasons for Ola cab acquiring TaxiForSure
Ola (formerly Olacabs), the mobile app for personal transportation has announced that it
has acquired TaxiForSure for $200 mn in a cash and equity deal. With this deal, Ola, which
is already the market leader in the personal transportation space with over 1-lakh vehicles on its
platform, has further deepened its footprint with TaxiForSure’s operator led model. TaxiForSure
is currently in 47 cities with over 15,000 vehicles registered on its platform.
What’s in the deal?
 Ola and TaxiForSure will continue to operate as separate entities.
 The leadership and all of the 1700 employees shall continue to work with TaxiForSure, with
Arvind Singhal (currently COO) being appointed the CEO.
 Aprameya Radhakrishna and Raghunandan G, the founders of TaxiForSure, will contribute in an
advisory role for a certain period.Bhavish Aggarwal, Co-founder and CEO, Ola said,
Ola and TaxiForSure share the same vision of revolutionising urban mobility. TaxiForSure has a
great team and they have built a very exciting business in a short time. There’s a lot of
complementary value in the strategy TaxiForSure has followed.
What changes for caboperators and customers?
There is significant complimentary value that this acquisition adds both on the supply and
demand side for Ola and TaxiForSure. TaxiForSure follows a different model of supply and
distribution by working with cab operators compared to Ola’s model of working with drive
entrepreneurs.TaxiForSure has also focused heavily on the economy segment of cab consumers
with innovative offerings like Tata Nanos as part of their fleet and Rs 49 as base fares in the past.
For customers, drivers and operators on the TaxiForSure platform, nothing will change.

6. Customers can continue to book a cab through the app and call centre and drivers will continue
to get access to customers on TaxiForSure’s technology platform as always.Raghunandan G, Co-
founder and CEO, TaxiForSure said,TaxiForSure coming together with Ola will provide us with
more opportunity than ever, to do what we do best. Post this acquisition; the combined entity will
be strong enough and better capitalized to offer the best value to all our stakeholders, including
our customers. This development ensures that industry attractiveness is preserved and the
combined entity can race ahead and continue to create unprecedented value for all stakeholders.
And this is what happens to the investors
Ola has been funded by Tiger Global, Matrix Partners, Sequoia Capital, Steadview Capital and
most recently, Softbank over its four rounds of fund-raising. Investors in TaxiForSure are Accel
Partners, Bessemer Venture Partners and Helion Venture Partners. With this acquisition,
investors in TaxiForSure will roll over their stock into Ola.
Unprecedented Space for Growth
Indian taxi market is estimated to be around $8 billion (Rs 48,000 crore) right now, out of which
only 5% is being managed under organized sector; which means that the market is wide open
right now. It is being projected that in the next 5 years, organized players such as Uber, Meru
and Ola will capture 15% of this market, which is growing at an astounding rate of 45% per year.
This means that the market is wide open right now, waiting for the next dare-devil entrepreneur
to smash every status-quo and come up with something is astonishes all.
But how?
TechnologyIs The Catalyst
If we observe the rapid 3 figure growth of all online taxi aggregators, especially Uber and Ola
cabs, then we will find that technology has been the major catalyst for these companies. They
built a platform based on technology, and the spread of smartphones fuelled it. Uber is a $18
billion start-up now, built solely on technology.

7. They introduced PayTm wallets to make payments, safety apps for women and in the process,
totally revolutionized the Indian taxi industry. The result was that Ola Cabs too had to
introduce app based payment, had to slash prices and bring it down to Rs 10 per kms and even
introduce the legendary kaali-peeli cabs into the mobile arena.The acquisition of Taxi For Sure
by Ola Cabs is just the beginning!
CashCashCash!
Now, coming to a practical problem: Online taxi aggregators are bleeding money, a lot of
money; and cash is no doubt the most important concern for all players. As per some reports, Ola
Cabs are bleeding close to $12 million every month, which is Rs 900 crore a year.
As an investment banker recently shared, its not the question of who is making profits right now,
because no one is; the question is who can bleed for a longer time.
Ola Cabs, which is valued at $1.4 billion is backed by Japanese business conglomerate Soft
Bank, which has the required patience and expertise to scale up the operations by absorbing loss
in the initial phase. But Taxi For Sure, which is a smaller company with only 1000 rented
vehicles in it’s fleet, and funding of $60 million till now, needed cash in huge amount to sustain.
Just before this acquisition happened, Taxi For Sure founder & CEO Raghunandan G said in an
interview, “As long as there is money on the table, we will continue to work. Also, we need to
see what costs are we paying. All the market players are bleeding a lot of money and it is a tight
rope walk.”
Symptoms of More Consolidation& More Mergers
Rumors are flying high that Uber is in talks to buyout Meru Cabs, which looks quite a possibility
right now. As discussed above, online taxi aggregation firms need cash, and Uber has tons of it
right now. India is Uber’s second biggest market after USA, and their biggest competitor Ola just
got bigger.

8. Besides, if we observe the Indian ecommerce industry as a whole, then after Flipkart-Myntra
merger, Ola Cabs TaxiForSure acquisition is being hailed as the biggest consolidation, and this
gives us the signal that the era of mergers and acquisitions is finally setting upon this industry. In
our neighborhood, a major consolidation happened when China’s biggest taxi booking app Didi
Dache which is backed by Tencent Holdings merged with their biggest competitor Kuaidi Dache
which is backed by Alibaba, SoftBank and Tiger Global. The result was $6 billion transportation
behemoth which is the biggest in the world after Uber.
In the last 6 months, Indian Ecommerce firms such as Flipkart, Snapdeal and Shopclues have
raised between $100-$900 million in funds; PayTm has been backed by none other than Alibaba
($575 million funding) to create a giant mobile based marketplace in India; Amazon is already
flushed with a war chest of $2 billion, and smaller ecommerce firms such as LensKart, FirstCry,
UrbanLadder, PepperFry and more are either raising funds or are in the process of raising funds.