- Ola’s self-driving service Ola Drive will available on Ola app, starting with Bengaluru
- The company has major plans to take on rival startups such as Zoomcar and Drivezy and is looking to undercut the competition on pricing
- India’s self-drive car rental is estimated to be valued at over $100 Mn with major investment coming in from auto giants in this sector
Riding on the unicorn status or its core ride-hailing business and Ola Electric, SoftBank-backed Ola has now forayed into the self-drive car rental market with the launch of ‘Ola Drive’.
The company that transformed daily commuting for Indians is now setting sights on the consumer auto market, which is reeling from slowing sales and the drop in consumption thanks to the credit crunch in auto loan providers as well as among citizens. Thanks to this drop, the market size for self-drive rentals and car subscriptions has increased tremendously.
A Mobility Insights 2019 report estimates the self-driving market to be a $100 Mn opportunity in India, which is currently highly under-penetrated. Plus, there’s a huge gap between driving license holders and car owners in India as one of the major driving factors for the self-driving market growth. India is said to have 127 Mn driving license holders as compared to the ‘cars to people’ ratio of 22:1000 in 2019. Also, the consumer preference for renting bigger, safer and powerful cars for intercity trips has added to the market size.
That’s exactly why Ola is stepping into the field. “The paradigm shift from ownership to usership has created a tremendous business opportunity in the car-sharing space,” an Ola spokesperson told Inc42.
To tap into this huge market opportunity, Ola has planned to invest around $200 Mn initially with the aim of increasing it to $500 Mn over the next couple of years. Currently hosting a 500 cars-strong fleet in Bengaluru, the company aims to expand its fleet to 20K cars by the end of 2020.
Ola Drive Competes On Price
The rental period proposed for Ola Drive is between two hours to three months, along with Ola’s claim to offer its services at 30% lower rates than the existing players. Ola Drive will initially be launched in Bengaluru, accessible through pick-up stations located across the city. The Bengaluru launch will closely be followed by other metros such as Hyderabad, Mumbai, and New Delhi. In addition to the rental costs, Ola Drive will also charge a security deposit starting at INR 2K.
Ola will also be standardising the services in all Ola Drive cars to include GPS, Ola’s connected car platform ‘Ola Play’, media playback, and Bluetooth connectivity along with access to the platform’s support and safety features such as a 24×7 helpline, emergency button (which prompts an immediate call from Ola’s dedicated safety response team), roadside assistance, and real-time car tracking.
Ola was founded in 2011 by Bhavish Aggarwal and Ankit Bhati as a cab-hailing service and since then expanded its services to include electric vehicles, micro-credit, food delivery and micro-insurance and now, self-driving car rentals. Till now, Ola has raised around $3.28 Bn in funding from prolific investors such as Ratan Tata, Sachin Bansal, Steadview Capital and more.
“With over 200 Mn subscribers, Ola Drive has the largest user base for a car-sharing service in the country,” the company said in an official statement.
Content Source: https://inc42.com