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Ola to invest $75M in a cab leasing program for drivers

Rahul Maroli ola

Online cab aggregator Ola, which raised $225 million in a round of funding from existing investors and new investors, has launched a cab leasing program for drivers which will let them lease a car for a deposit and monthly lease payments, with an option to own the vehicle after 3 years. The company says that it has piloted the program with 1,000 vehicles in Bangalore, Chennai, Hyderabad and 3 other cities, for which it has sourced vehicles from Maruti Suzuki. 

It claims to be in talks with other car manufacturers and financial institutions to enable the leasing model for over 100,000 drivers by the end of 2016. It expects at least 10,000 leased cars to be on road by December this year. The program, which will be worth Rs 5,000 crore ($753 million), will see an initial investment of Rs 500 crore (~ $75 million) by Ola, and supposedly raise independent funds for this company owned subsidiary.

Rahul Maroli, who Ola recently appointed as the VP of strategic supply initiatives, will head the leasing business. The drivers will need to pay Rs 35,000 as a joining fee, while monthly lease rental will start from Rs 15,000 and will include routine maintenance costs. After 3 years, the driver can choose to own the car, with a 20% payment of the residual lease value.

Free WiFi for Prime cabs under loyalty program
Last week, Ola added free WiFi, ‘superior cars’, best rated drivers, and an opportunity to meet Narain Karthikeyan, Abish Mathew and Milind Soman through its ‘Select’ program for riders taking Ola Prime rides in Bangalore. Ola Prime is available in Mumbai, Bangalore, Delhi, Pune, Chennai and Jaipur and is a drop service through sedans and SUVs. Ola launched the rewards and loyalty program called ‘Ola Select’ for its frequent customers last month. At that time, Select users would be able to use free WiFi, no-cost upgrades, discounts and ‘exclusive benefits’ from partners Myntra, Snapdeal and Cleartrip.

Driver cashbacks
Earlier this month, Ola partnered with Indian Oil (IOCL) to provide its drivers cashbacks of Re 1 for every liter of fuel filled at IOCL stations across India. The program would also extend to CNG fuelling in Delhi. The company would also set up mobile contact centres at IOCL CNG stations to talk to driver partners who’d want to register on the platform.

Drivers charged for using the platform
This month, Ola and rival Uber started charging their drivers Rs 300 a week to try and prevent them from using other aggregating platforms. This charge, which applies regardless of usage, is being attributed to phone, mobile Internet connections and other services provided by the aggregators.

Also read: Ola’s Anand Subramanian on TFS integration, user expectations, smaller city expansions & more

Our Ola coverage here.

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