We all have role models, in the case of taxi companies Uber is a great example, as is Ola. In the latter case, it was in 2011 that they began their journey to position themselves as the largest transportation company in India. We'll tell you every essential part that has worked for this and other companies so you can take the positive and build your own.
Ola's true story
Uber's biggest competitor in its country, creating rivalry between business models. This company, as you can already guess, started in India, but it was dedicated to several sectors, including taxis. Its main attraction was trips that guaranteed safety, with great rates that you could cancel when you arrived at your destination.
It worked with calls, booking with the date and time you wanted to be picked up. Another important point from their past is that they only accepted cash as a payment method. However, its creators were visionary, taking the risk of evolving towards an app-based model. This happened as soon as they saw the growth of devices running on Android and Apple.
The change of the Ola taxi company today
Its revenue model is one of the main reasons that has boosted Ola in recent years. In addition to not only covering India, they are in approximately 169 countries, such as the United Kingdom, New Zealand and Australia. It is so successful that it generates around $300 million in revenue, yet it is expected to grow at a faster rate.
When a potential customer enters the Ola app, the device's GPS system automatically generates its location. There are various categories available that show the available taxis by car model, not all taxi companies organize it this way. Basic data is then filled out and a request is sent that arrives directly to the driver's device.
If the trip is accepted there is a confirmation message, to give the driver's number for more direct contact. Unlike when they started working, now you can also pay through UPI ID.
What could you imitate from Ola to be successful?
Ola has not always been a successful economic model, they have had their bumps in these 11 years. We spoke before about your reservation by call, this was changed but during that time you were able to reduce the use of the service. They now share many of the characteristics in terms of business structure with Uber.
Ola charges 15% to 20% of the total fare, but the charge will depend on the vehicle and location of the customer. We will delve into the different revenue streams of the business model used in taxi companies like this. That manages to remain profitable today, which is why it has become an example to follow.
What influences Ola rates?
It is important, as a business owner, to have certain concepts, these are what Ola is governed by. One might think that, being a little knowledgeable about the transportation market, you can start your business with whatever prices you see fit. On the contrary, everything that has to do with rates must be organized and premeditated. Well, your long-term success will depend on that.
When you start charging for the service you provide, a flat rate is made, which will be your base rate.
The total travel time, we can then see that the total fare is calculated based on the distances per route. Which must always include from the beginning of the journey until reaching the destination.
An important point is to know that distance rates are charged per kilometer. At Ola this can change from one city to another and depending on the type of reservation.
Waiting time, if the passenger leaves the driver waiting, he or she must pay for that extra time.
Early booking fee, if the client decides to book their trip in advance to guarantee it happens, they must also pay in advance.
Cancellation fee, Ola has a special charge if a booking is canceled.
This company advertises brands, playing advertisements, handing out brochures to passengers. All this is paid for, so you have an extra source of income for your economic model.
Another of the pillars of this model is renting vehicles, they buy them so that when renting them they generate an active value. In addition to generating jobs for those who do not yet have the opportunity to have their own car.
Ola Prime, the company has taken it upon itself to partner with Microsoft, Apple Music, among other corporations. All in order to provide entertainment to passengers while they are in the cabin.
Examples for future entrepreneurs
Co-founder and CEO, Bhavish Aggarwal, comments that the firm has been about creating sustainable, self-sufficient and profitable institutions since its inception. He says that the model always seeks to satisfy the demands and needs of customers. Given these characteristics, it has become an example to follow in the private transportation market.
The business models of Ola and Uber are one, so much so that it is normal to hear that Ola is a copy. Notably, it is actually growing at a faster rate and is expected to bring in more revenue than Uber. Whether you choose one or another to follow as an example, the important thing is to take what has worked and implement it in your business. Take advantage of the already paved path that taxi companies provide for your own success.