Ola, an Indian ride-hailing giant has decided to shut down its business in the UK, Australia, and New Zealand after 6 years of expanding operations in the international market. The Softbank-backed company wants to focus more on its Indian domestic operations ahead of its initial public offering (IPO).
Ola ceasing international operations
In 2018, Ola decided to go international launching services in Australia and New Zealand followed by the UK. The company has started sending out notices to its users regarding its closure. In Australia, Ola decided to cease operations from April 12th, with the company asking its drivers to remove all labels and stop taking bookings under its permit.
Ola’s spokesperson said, “immense opportunity for expansion in India,” where it operates in major cities in India. “With this clear focus, we’ve reassessed our priorities and have decided to shut down our international ride-hailing business in its current form,” the spokesperson added.
Ola’s domestic expansion plans
The decision to exit the international market comes as Ola prepares for the electrification of its fleet and goes ahead with the IPO. The company has already purchased 8,000 electric scooters from its sister firm, Ola Electric. Ola Cabs’ chief executive, Hemant Bakshi, stated to the ET that the firm would focus on electrification and further premiumisation for future growth.
Ola plans to utilise Rs. 1226.43 crore out of its 5000 crore IPO on capacity expansion of its cell manufacturing, according to papers filed with SEBI. The company filed a draft red herring prospectus (DRHP) to use Rs. 1600 crore on research and product development while another Rs.800 crore will be deployed to repay debt.
Ola founder, Bhavish Aggarwal had also invested Rs.45 lakh in Pune-based EV startup Tork Motorcycles. Ola and Uber, its rival in India slowed their operations in lockdown and since have started their unit economics. Both firms reportedly started talks regarding a merger, but the talks failed as they were unable to reach an agreement.
Uber CEO Dara Khosrowshahi told the Economic Times, “While (rival) Ola focuses on other areas…we love the ride-sharing business. We also continue to expand into new categories and are dedicated to sustainability. Some of our competitors are distracted by shiny, new efforts and IPOs; that’s great. I’m undistracted and completely focused on the mobility business here as there’s an enormous amount of upside for us and our positioning has never been better,”
