Business

Ola to challenge Uber in UK ride-hailing market

Driver with Ola Image copyright Ola

Indian taxi-hailing giant Ola is moving into the UK as it continues to challenge Uber around the world.

The company, which was founded in 2011, has 125 million customers and is already present in 110 cities. It plans to start operating in South Wales and Greater Manchester.

Unlike Uber it will offer a choice of a private hire vehicle or black taxi.

It says it is working with local authorities across the UK to expand nationwide by the end of 2018.

Ola says it will begin UK operations in South Wales in the next month.

Image copyright Ola

This move is the first serious challenge in the UK to market-leading taxi-hailing app Uber, which was founded two years earlier than Ola, has three million drivers and operates in 600 cities in 65 countries.

Currently, Ola only operates in two countries, the UK will be its third, after starting its first operations in Australia earlier this year.

Both companies count Japan's Softbank as an investor, but the two already compete fiercely in India, although Uber pulled out of operating in South East Asia earlier this year.

Softbank is a major backer of the world's leading taxi-hailing apps, with investments in Chinese giant Didi and Grab, although it has not invested in Uber's chief US rival on its home soil, Lyft.

Image copyright Reuters
Image caption Pioneer Uber has come in for criticism on many fronts - although it is wildly popular

Services such as Uber - often called "ride-hailing" or "ride-sharing" apps - at their simplest were designed to link drivers, via a mobile phone app, with people who they were prepared to give a lift to in return for a bit of petrol money.

As it has grown, Uber in particular has come under scrutiny over passenger safety and how it treats its drivers.

It has been engaged in court battles over whether it is an employer or simply an app, and how much it should regulate its drivers and be responsible for passenger safety. It has been banned from some cities, and had to fight to keep its licence to operate in London.

It is particularly resented by licensed drivers of black taxis, for whom it takes years of work to qualify for their licences.

Ola will be the first app to link to both these, as well as individuals who offer private hire.

Apps in the UK that currently connect passengers with black taxis include Gett and Mytaxi.

Steve McNamara, general secretary of the Licensed Taxi Drivers' Association (LTDA), which represents black taxi drivers, said: "The LTDA welcomes fair competition in London and would expect to see Ola play by the rules if granted a licence to operate in the capital.

"Ola says that it is committed to raising safety standards in the UK's private hire industry from the get go, unlike Uber."

Passenger safety

Ola's UK launch statement stresses its willingness to engage with the authorities.

It says it "seeks to lead the industry with its approach to passenger safety".

Ola also plans to offer round-the-clock voice support and an options to share journey details with a passenger's emergency contacts.

Analysis:

Theo Leggett, business reporter

Image copyright Getty Images
Image caption Bhavish Aggarwal was 26 when he founded Ola in 2011

After years spent fighting Uber on its home ground in India, Ola is taking the fight into its rival's core markets. First Australia, now the UK.

The battle between the two in India has been bitter, and aggressive marketing has proved costly. Ola lost about $700m last year, despite a big increase in revenues.

Both firms are backed by the Japanese technology giant Softbank. That's led to speculation about a possible merger in the Indian market, or at least an easing of hostilities.

Yet now Ola is moving into regions where Uber is already well established - and not just Uber.

The UK is already a crowded market, and one in which Uber itself has faced fierce opposition from established taxi providers, not to mention friction from licensing authorities unhappy at some of its business practices.

Ola has already made a start at marking itself out as different - stressing its concern for passenger safety and its keenness to cooperate with authorities but it remains to be seen if such a key investor is happy to see these two go head to head in another major market.

'Compelling service'

Ola founder and chief executive Bhavish Aggarwal studied computer science in Mumbai and worked for Microsoft after that. He was 26 when he founded Ola in 2011.

He said: "The UK is a fantastic place to do business and we look forward to providing a responsible, compelling, new service that can help the country meet its ever demanding mobility needs.

"We look forward to our continued engagement with policymakers and regulators as we expand across the country and build a company embedded in the UK."

Ola's entry into the UK follows its launch in Australia in February 2018, where it now operates in seven major cities.

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