Ola puts electric plan in top gear, rejigs management to bolster project

Freshly-crowned unicorn Ola Electric Mobility has been on an overdrive to bolster its team to take its electric vehicle and solutions initiative forward.
The company, according to sources, is diverting a part of its manpower from teams which mainly manage Foodpanda and Ola Play.

Some of the mid to senior level managers, executives, vice-presidents and engineers have been shifted to the Ola Electric team over the last few weeks.
The drive has gained further momentum after it managed to again get back into SoftBank Group’s good books and got a massive $250 million cheque from the Masayoshi Son-led global conglomerate. Some of the people who have been recently moved to Ola Electric include Ankit Jain, who was vice-president and head of Ola Play. He has now been appointed co-founder of Ola Electric Mobility. The company, according to sources, is now completely focusing its manpower and resources on electric and the rest is, for the time being, taking a back seat. Ola did not respond to a detailed questionnaire sent on the issue.
“Over the last few weeks, some senior management teams have been asked to move to the Electric department. We have been told that the reshuffle would continue for some more time,” said a senior manager in the company who has now been shifted to Ola Electric.
Sources said the company is on a tight deadline to roll out its electric initiatives. Internally, the company has given a three-year timeline to roll out the first set mass produced electric vehicles as well as related infrastructure in association with original equipment manufacturers (OEMs). According to sources in the know and going by the hiring plan for its Palo Alto-based ‘Advanced Technology Center’ in the US, the company intends to design and build electric mobility solutions as well as related accessories. The plan is to collaborate with the OEMs and new-age EV makers.
The cab aggregator is planning to give a headstart to its EV ambitions by hiring heads for its engineering and designing verticals, data scientists, and around 150 engineers for the US facility.
The brief given by chief executive officer (CEO) Bhavish Aggarwal and co-founder Ankit Bhati is to mainly design and develop ‘practical’ EV solutions for the firm, which can be rolled out in the next two to three years. This is, however, not the first time that the company has gone for an internal reshuffle. In fact, it is possibly the third HR shuffle in the space of a year. The ride-hailing unicorn had transferred a huge group of people from Ola to Foodpanda when Aggarwal’s focus switched to the food tech company it acquired in 2017.
However, after Ola changed its plans for Foodpanda, people were shifted back from the food delivery app to Ola. And during both shifts, there was significant attrition within the company.
From the head of human resources department to top bosses in the legal division, the list of exits is long. The names include chief operating officer (COO) Vishal Kaul, who left after a year and a half with the firm, chief people officer Susheel Balakrishnan, who stepped down within three months of joining, and marketing director for Australia and New Zealand Natasha Daly.
As many as nine senior leadership team members quit Ola in the last one year. Even Aggarwal’s chief of staff Akshay Alladi exited the firm in a little over a year. The company has also seen a series of exits of vice-presidents and product leaders, all in the last six months. In January, one of Aggarwal’s core group members Pallav Singh resigned as COO and quit from an active role in the company.

Ola Electric gets $250 mn from SoftBank, becomes India's newest unicorn

Ola's electric vehicle arm, Ola Electric Mobility has secured a funding of over Rs 1,725 crore (about $250 million) from SoftBank, according to regulatory documents.
With this latest infusion, Ola Electric Mobility (OEM) has joined the list of unicorns in India that includes names like Flipkart, Zomato, Paytm as well as its parent, Ola.

As per regulatory documents filed with the Registrar of Companies, OEM issued "4,326 fully and compulsorily convertible series B preference shares of face value of Rs 10 each having the rights, privileges and preferences..." to SB Topaz (Cayman) Ltd.
The total amount paid was about Rs 1,725.04 crore, it added.
The allotment was made on Tuesday following a special resolution passed by the board members on June 25, the filing showed.
SoftBank is also the single largest investor in Ola.
In May, Tata Sons Chairman Emeritus Ratan Tata - who is also an investor in Ola - had invested an undisclosed amount in OEM as part of series A funding round.
Also as part of the series A, OEM had announced raising Rs 400 crore led by Tiger Global and Matrix India in March this year.
Ola Electric is currently running several pilots involving charging solutions, battery swapping stations, and deploying vehicles across two, three and four-wheeler segments.
OEM was initially established to enable Ola's electric mobility pilot programme in Nagpur.
In 2018, Ola announced 'Mission: Electric' to bring 1 million electric vehicles on Indian roads by 2021.

Electric drive: Ola bets on two, three-wheelers, says e-cars to take time

Expecting rapid adoption of four-wheeler electric vehicles at a mass scale to take time, ride-hailing firm Ola is betting big on two and three-wheelers for its electric mobility drive, according to a senior company official.
With lessons learnt from its experiment in Nagpur, where the company had partnered with Mahindra & Mahindra in 2017 for a multi-modal electric mass mobility project, Ola believes right now "four-wheelers are not yet ready" for such usage in India on a large scale.
Therefore, the company is now focussing on deploying 10,000 electric vehicles (EVs), a mix of two and three-wheelers, on Indian roads by the end of March 2020.
"The biggest lesson (from Nagpur) was that (electric) four-wheelers are not yet ready. It is going to take a couple of years for the math on four-wheelers to work," Ola Electric Mobility (OEM) co-founder Anand Shah told PTI.
He, however, said the company hasn't given up as it is confident that electrification is viable in the long run.
Sharing the company's road map for electric mobility, Shah said, "In our view, we are putting our bets on three-wheelers and two-wheelers in the coming year. It is absolutely fair to say that after the learnings from Nagpur experience, our focus will be on two and three-wheelers first in terms of EVs."
Right now in the EV market in India, he said it is mostly in three-wheelers, with E-rickshaws being "the largest population of EVs by natural adoption".
Further, he said, "We think two-wheelers are also emerging very quickly, partially because of policy and also because of the rising interest in commercial use of two-wheelers, whether that is in deliveries for our own food business or any of our competitors, e-commerce companies or scooter sharing."
OEM has already started pilots with a fleet of a hundreds of three-wheelers in Gurugram.
"We are expecting to put 10,000 EVs, a mix of two and three-wheelers, on the road by the end of March 2020. We are very committed to make it happen," he said adding the company was are looking to deploy these in whichever viable pockets of the country that were willing to work with it.
Delhi, Maharashtra, Kerala, Karnataka, Telangana, AP and Gujarat could be some of the places, he said.
Reiterating that Ola is still "actively working on electric four-wheelers", he said, "We are testing electric cars. We have tried every electric car that exists in India today, but we think it's going to take some time for rapid four-wheeler EV adoption at scale."
On investments for electric mobility, Shah said, "We have raised Rs 400 crore from some of our early investors -- Tiger Global Management, Matrix India. That money will be spent on meeting these milestones, on getting the technology right, getting the business model right and we will keep growing from there."
Elaborating on the experience from the Nagpur project, he said,"There needs to be more four-wheeler EVs, when we started in Nagpur there was literally only one make of electric car available in the market."
Besides, he said there has to be appropriate battery technology for Indian conditions and usage along with a proper understanding of infrastructure utilisation to strike balance between usage of land, power and time of the day.
Shah further said electricity cost is also a very significant input although now the government is beginning to address this.

Ola in talks with Audi, Merc, BMW for self-drive subscription service

Ride-hailing platform Ola is in discussions with luxury carmakers, including Audi, Mercedes and BMW, to launch a subscription-based service under its self-drive offering, according to sources.
Ola has been running a small-scale pilot of the self-drive service in Bengaluru currently, and is expected to launch the offering in the next few weeks through Ola Fleet Technologies.

The company is also believed to have earmarked an investment of up to USD 500 million (including debt) for the self-drive service.
According to sources privy to the development, the company is in talks with carmakers like Audi, Mercedes and BMW to bring to India a model where users can get access to luxury cars by paying a subscription fee.
Email queries sent to Ola, Audi, Mercedes and BMW did not elicit any response.
One of the persons said the format is available in developed markets like the US, but given the high cost of luxury vehicles in India, a direct-to-customer model may not be not feasible in the country.
The person added that Ola sees a lot of potential in bringing this model to India given its scale of operations across multiple categories and cities.
Ola already allows customers to book rides in luxury cars through its 'Lux' offering. In October 2016, the Bengaluru-based company had partnered with BMW for expanding the category.
The company, which competes with the US-based Uber in India and international markets like Australia, has been aggressively ramping up its rides business as well as food delivery operations (through Foodpanda).
It had recently announced that Hyundai and Kia are investing USD 300 million in the company.
Ola, which counts names like SoftBank Group and China's Tencent Holdings among its investors, had received Rs 650 crore funding from Flipkart co-founder Sachin Bansal in February this year.
Ola's electric mobility arm Ola Electric Mobility has also raised Rs 400 crore from Tiger Global, Matrix India and others.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Ola making profit on every ride, IPO in 4 years: CEO Bhavish Aggarwal

After years of intense competition and burning millions of dollars, India’s ride-hailing giant Ola claims it has come out on top of its main competitor Uber and is now making a profit on every ride it offers in India.
Co-founder and Chief Executive Officer Bhavish Aggarwal said the company was operationally profitable and would soon become cash flow positive. “Ola in India makes money on every ride. Our focus over the past couple of years has been to keep growing the market and our share in the market and build up on sustainable business,” Aggarwal said at a fireside chat in Bengaluru on Friday.

Turning a profit would essentially bring down the firm’s reliance on raising capital from investors to grow its business in the country and beyond. Ride hailing has been termed as one of the most capital intensive businesses.
However, unlike more traditional companies, Aggarwal said Ola would not push to go public immediately after making a profit. “The ambition for me and (co-founder) Ankit Bhati has always been to build a sustainable, long-term, independent business. And, in that direction, we are definitely going to IPO. Our goal is to aim for an IPO in the next three-four years,” Aggarwal said.
These comments come at a time when some of the early investors in Ola are looking for exits, both partial as well as full. The company has been in talks with Singapore-based Temasek Holdings to pick up shares on the secondary market. Mint reported on Friday that Temasek had bought shares worth $30 million from early and existing employees of Ola at a valuation of $2.5-3 billion. Business Standard could not ascertain if the deal had indeed been completed.
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By showing certainty over future plans, Aggarwal brushed off concerns that SoftBank, its largest investor, was trying to steer the company in a different direction. Sources in the know have said that the Japanese investor had asked Uber and Ola to consider a merger (SoftBank is also the largest shareholder in Uber). Talks reportedly fell apart after neither side was able to agree on any terms.
“We are probably among the few large Indian internet companies that are independent. SoftBank is a shareholder, they have a voice at the table, but that’s only one voice. In the end, we do what the entire group of shareholders or stakeholders jointly feel is valuable,” Aggarwal said at the event.
In a valuation document that Business Standard had reviewed last year, Ola had said it would turn profitable by FY19, projecting to earn a profit of Rs 11.7 billion in that year. The document added that the firm would earn Rs 64.23 billion in profits by FY21, equating to almost $1 billion in projected profits. The valuation of the company according to that document stood at about $3.5 billion.

Common shareholder SoftBank calls for merger between Uber, Ola in India

Japanese investment giant SoftBank has called for a merger between homegrown Ola and US firm Uber’s India unit as part of its planned consolidation in Asia’s fast-growing ride hailing app market.
The talks, facilitated by SoftBank, which is the largest investor in both companies, have been going on for nearly a year, according to sources close to the development. However, in the past few days, this call for a merger between Uber and Ola has gathered steam.
Softbank’s push for consolidation in India’s ride hailing market comes days after Uber announced its exit from Southeast Asia after selling its local unit to rival Grab. Post the completion of that deal, Uber will control 27.5% stake in the combined entity.
“Talks have been on between the senior executives of both the firms (Uber and Ola),” said one of the persons with direct knowledge of the talks, declining to state who the officials are given that the information is not public yet. “The deal may be closed in a couple of months,” the person added.
Another source added that SoftBank is in favour of Ola acquiring the Indian unit of Uber, but the finer details of the deal are being discussed. Both companies are looking at having a controlling stake in the combined entity, which is also why the talks have been progressing relatively slowly so far.
Softbank declined to comment on the development, while an Uber spokesperson denied that any such talks on a potential merger or acquisition are currently on.
An Ola spokesperson declined to comment on this development, but said the Bengaluru-based company is always looking for opportunities to grow its footprint. “In India’s transformative digital journey, Ola will always be an active and integral part for decades to come. SoftBank and all other investors are committed in realising this ambition,” the company said in a statement.
If the deal goes through and Ola acquires Uber’s India unit, it will mark the US firm’s fourth large retreat globally. The company has so far sold its China unit to rival Didi, Russian unit to local player Yandex and earlier this week it also announced the sale of its Southeast Asia unit to Grab.
“The great news about our Grab deal is that it allows us to double down to invest aggressively in our core markets—and we consider India very much as core to Uber’s success.
We’d, of course, look at any deals that can add value to our partners and shareholders, but we believe in controlling our own destiny in India,” Dara Khosrowshahi, CEO of Uber, had said in an internal statement that was sent to employees and was later made public on the company’s blog.
While both companies claim leadership in terms of market share in India, independent analysts peg that the gap between the two firms is not that large. This has been a major point of contention in the truce talks that Softbank is calling for between Uber and Ola. Previously, both companies were seen to cut driver earnings simultaneously which experts said was indicative of a peace treaty between the two.
Uber might be under immense pressure from investors to cut losses in order to go public, but the company says it is still invested in India and will leverage profits it earns from its other markets to win in the country. The US firm is estimated to burn between $22-25 million every month, which while significant, is still far less than the billions of dollars it was burning in markets such as China and Southeast Asia. Ola’s burn rate is said to be slightly lower than that of Uber, but not by much.

Ola's sputtering India e-vehicle trial a red flag for PM Modi plan

Ola’s pilot project to test a fleet of electric vehicles in Nagpur was expected to herald a coming revolution in the Indian automobile industry. So far, it has only exposed fractures in Prime Minister Narendra Modi’s ambitions to make all new vehicles electric by 2030.
With an initial investment of about $8 million, SoftBank-backed Ola launched the project last year at an event that had all the trappings of a state function, including a flag-off by Transport minister Nitin Gadkari.
But nine months later, the program has hit a snag: Ola drivers, unhappy with long wait times at charging stations and high operating expenses, want to return their cars and switch to fuel-guzzling variants.
Out of 20 Ola electric car drivers, interviewed by Reuters in Nagpur, more than a dozen said they have either returned their electric taxis and switched to diesel, or are planning to do so.
Ola had said it would make 50 charging points available across four locations in Nagpur for its fleet of 200 electric vehicles, but on a visit to the city in late January, Reuters found only about a dozen charging points. Ola has since added 10 additional charging points but is still short of its target. Ola did not respond to requests for comment for this article.
Getting infrastructure built in the world’s biggest democracy where a not-in-my-backyard culture proliferates is a barrier for a lot of businesses in India. And it is proving to be the same for charging stations — Ola was forced to close one in Nagpur last year after protests by residents angered by traffic jams caused by drivers.

Global auto makers have warned that India is not ready for electrification, saying the government must first lay down a clear, long-term policy, provide incentives to encourage manufacturing of electric vehicles to bring down their cost and create infrastructure.
Gadkari added to uncertainty when he said last month that the government will no longer draft a separate electric vehicle policy. He did not comment on the 2030 vision.
The Ola project has not turned out to be economically viable for either the company or its drivers, said a source.
“The project’s not flying as of now and the economics is not working out,” the source said.
Electric car sales in India made up less than 0.1 per cent of annual sales of more than 3 million passenger cars. The lack of demand is mainly because they are expensive — due to high battery costs — and as their range is limited and there isn't a charging infrastructure.
In China, in 2017, electric vehicles made up about 2 per cent of annual passenger car sales of 24.7 million. The Indian government had been determined to promote electric vehicle use, starting with public transport to combat rising pollution and reduce the nation's dependence on imported oil.
India’s 2030 ambition was part of a broader move by countries like China and the United Kingdom, which have set similar goals. This has spurred billions of dollars in investments by carmakers like Volkswagen and Ford Motor.
M&M is the only electric carmaker in India and the high cost of even its entry-level model, which starts at Rs 760,000 is a barrier for many first-time car buyers, and a non-starter for taxi drivers who can get a diesel or gasoline propelled car for about half the price.

While Ola has tied-up with Mahindra for the pilot project, its struggle to make the fleet viable in small Indian cites with much less congestion and space constraints than cities like Mumbai, underscores the magnitude of the challenges.
A shortage of stations and the limited range of cars has meant longer queues to recharge. During summer months when batteries discharge faster and need to be recharged more, the situation may worsen unless more charging points are added, said drivers.
The cars are owned by Ola and leased to drivers for Rs 1,000 a day, but many complain that the amount is too high and they need to work for 12-16 hours to make a decent living, given they waste 3-4 hours a day on charging.
One of the drivers said that after paying Ola the rent for the car and shelling out Rs 500-600 per day for charging, he is left with about ~500 rupees at the end of a 14-hour day giving him little time to rest or spend with his family.
“If they don't give us the (charging) facility, why should we drive these cars,” said the driver, who had just spent an hour waiting for his turn to charge the car, and would have to wait for another 90 minutes while it charges.
Ola founder and chief executive officer Bhavish Aggarwal told Reuters last April that the company would pilot a few thousand electric vehicles in several Indian cities in 2017 and then scale up.
However, it has still to take the experiment beyond Nagpur.

Ola hires top auditor to probe recruitment fraud by HR head Yugantar Saikia

SoftBank-backed ride-hailing company Ola has roped in one of the ‘Big Four’ auditing firms to investigate potential recruitment fraud allegedly committed by its human resources head Yugantar Saikia.
A source told Business Standard that Saikia’s laptop was seized and emails accessed as part of the investigation due to which he had also been retained on the company’s rolls. He added that Saikia had put in his papers a while ago and was due to quit on February 18.
While Ola confirmed that there was an ongoing investigation, it did not divulge any further details on the same.
“An internal investigation is currently on and one cannot give further details at the moment,” said an Ola spokesperson.
Online publication FactorDaily, which first reported about the probe, said the fraud could be to the tune of a “few million dollars”. The publication said when it contacted Saikia, he said he had not been notified of any such action by Ola.
Saikia had allegedly colluded with recruitment agencies, accepting kickbacks to favour them in offering business deals.
The audit firm that has been brought in to investigate the fraud can review the employment of 1,000 or more people, who have been recruited from the external agencies in question.
OlaOla is engaged in a high-stakes battle for leadership in India’s ride-hailing space with Uber Prior to joining Ola as senior vice-president and chief administrative officer, Saikia worked with San Jose-based data analytics firm FICO as a senior director for the Asia Pacific Region.
Before that, he had worked at American Express as service delivery leader for the global infrastructure optimisation division.
The unearthing of the potential scam comes soon after the company closed a $1.1 billion round, which saw participation from investors Tencent, SoftBank and Ratan Tata-backed UC-RNT fund. Ola’s valuation had dropped from a peak of $5 billion to $3.5 billion during the latest funding round.
Ola is engaged in a high-stakes battle for leadership in India’s ride-hailing space with Uber, a company that is recovering from a slew of governance and leadership issues of its own.
Uber, too, has had its fair share of troubles from India, after Eric Alexander, a senior executive, illegally obtained the medical records of a rape victim.
Global publications have maintained that the handling of the Delhi rape case by Uber’s top management is one of the big reasons why founder Travis Kalanick was ousted from his position of CEO last year. Alexander had allegedly shown the documents to Kalanick. Thus, he was aware of the illegalities but did not intervene.

Ola, Uber train drivers to 'behave' this New Year's eve

For the next few days, drivers at cab-aggregator Ola, in the Delhi-NCR region, would periodically get a recorded message from the Gurgaon Police ‘advising’ them on how to behave
with riders. The same kind of messages would be relayed to drivers in other states as well.
“A recorded message from a senior police official would be sent to the drivers on how they need to behave with riders. Also they are sensitised on how they need to deal with

situations where the rider might be causing the problem,” a source said.
Uber is also organising classes for its drivers that includes showing short video messages teaching them on how to deal with drunk passengers, as well as women travelling alone.
“Safety is a two-way street, especially when two people are sharing a ride. And, while no means of transportation is 100 per cent free of accidents and incidents, we’re encouraging
our driver partners to help keep the roads safe for everyone,” an Uber spokesperson said.