Logistics

Ola’s losses widen as costs rise

Priyanka Pani Mumbai | Updated on January 15, 2018

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Cab operator has been spending more to stave off stiff competition from rival Uber

ANI Technologies, which owns taxi-hailing app Ola, has reported a consolidated loss of ₹2,311 crore in fiscal year 2016. This is about three times the ₹796 crore loss it posted in 2015.

The increase could be due to the intense battle it is fighting against American rival Uber to grow its market share.

However, the Bengaluru-based company registered about seven-fold growth at ₹758 crore during 2015-16 as against ₹104 crore in the year-ago period, as per the company’s filings with the Registrar of Companies assessed on business research platform Tofler. The numbers are consolidated figures for the company, which has subsidiaries — Ola Fleet Technologies (leasing business), APRA labs, Serendipity Infolabs (TaxiForSure) and Zipcash Card Service.

Ola earns revenue from the commission it charges from drivers and, for the last 6-8 months, the company has increased the commissions.

As per the company's financials, employee costs, including ESOPS, have gone up considerably to ₹461.60 crore in 2016 from ₹85.16 crore in 2015.

The SoftBank-backed company has also recently formed two new entities — Ola Electric Mobility Pvt Ltd and Ola Skilling Pvt Ltd — for its electric car foray and training its drivers, respectively.

Over the course of 2015, Uber significantly increased its market share by spending heavily on getting more cabs onboard on the back of heavy advertising and promotions.

Ola’s ad spend increased to ₹437.89 crore in 2015-16 from ₹99.84 crore the previous year. Last year, the company entered into newer segments such as Ola rentals, Ola outstation and Ola luxury which helped boost its revenues further.

The company has so far raised about $1.5 billion from investors, including SoftBank Group, Tiger Global, Matrix Partners, Steadview Capital, Sequoia India, Accel Partners US and Falcon Edge.

Recently, the company raised about $200 million from SoftBank, Ratan Tata and Falcon Edge according to RoC filings.

Published on April 30, 2017

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