Bengaluru-based cab hailing startup – Ola has shut down TaxiForSure business and has laid off over 1,000 employees. Ola had acquired TaxiForSure last year in March for over $200 Mn.
This step seems to be a consolidation strategy in a bid to strengthen its core business against rival Uber. As revealed by one of the Ola investor, the farewell to employees will result in a cost reduction of around ($4.5 Mn) INR 30 Cr. Earlier, Ola had also pulled its legs out from grocery and food delivery businesses as well.
One of the top Ola executives, said, “Since the acquisition, Ola has been unclear about the brand positioning of TaxiForSure. Silently, the TaxiForSure fleet was transferred to Ola supply and even incentives were more lucrative for Ola vs TaxiForSure.”
Of the total 1300 TaxiForSure employees, only 250 have been retained from three major cities and 30 each in the smaller cities.
TaxiForSure was founded by IIM-Ahmedabad alumni Aprameya Radhakrishna and Raghunandan G in 2011. Both the founders and the top management of TFS had stepped down from the company post-acquisition. Four months later, Arvind Singhal (the then CEO of TFS) had also resigned from the company and Pallav Singh who was one of the early employees at Ola was appointed as the CEO.
The company had raised around $60 Mn before acquisition from investors such as Accel Partners US, Accel India, Bessemer Venture Partners and Helion Venture Partners.
In last two years, Ola also witnessed a lot of structural changes and exits of some prominent people. This included the head of cabs category management Pradeep Dodle, associate vice president of products Harsha Kumar and Ola’s payments business head Rushil Goel.
The current year has been a ‘tug of war’ for Ola, with opposite ends pulled simultaneously on competition, surge pricing, licence issues and more. Not only this, it also suffered threats to get banned by Mumbai taxi and auto rickshaw unions. The things also got messy when Uber sold its China business to Didi Chuxing earlier this month, which is a minority investor in Ola.
The only ray of hope was seen with Ola’s valuation marked up to $4.2 Bn after $50 Mn Investment From US Based Vanguard.
Founded by Bhavish Aggarwal and Ankit Bhati, Ola has cumulatively raised $1.25 Bn from investors such as Tiger Global, DST, and Softbank among others. Also in November 2015, Ola raised $500 Mn in its Series F funding round at a valuation of $5 Bn. Baillie Gifford, Falcon Edge Capital, Tiger Global, SoftBank Group, DST Global and Didi Kuaidi participated in this round of funding.
The development was first reported by ET.
CA Ayush Agrawal