Update: Ola said in a statement that TaxiForSure’s assets and operations will be fully merged with OlaCabs platform, and will be integrated with Ola Micro service. “…TaxiForSure…has been seamlessly integrated onto the Ola platform with the launch and rapid adoption of Ola Micro. TFS has contributed immensely towards Ola Micro’s success within a short span of time,” added the statement. All TaxiForSure drivers and driver-partners are now integrated into Ola app, while the company said the integration process has been going for the past 18 months.
Regarding lay-offs: “In the course of the integration (with Ola), we have absorbed as many TFS employees for open roles in Ola to support our growth. For positions that cease to exist as a result of this transition, we are offering enhanced severance benefits and outplacement services to help affected employees pursue new career opportunities,” the statement added.
The entire statement from Ola has been attached below the story.
Earlier: After acquiring Bangalore-based TaxiForSure (TFS) for a reported $200 million in March 2015, Ola is shutting down TFS unit and will be laying-off almost 1,000 emloyees, reports TechCircle. SoftBank-backed OlaCabs will lay off 90% of the workforce in TFS across its call centers, driver relations, and business development units, added the report. Some employees will receive a 3 months’ severance pay as compensation, while some are being shifted to other cities or units.
A spokesperson from Ola confirmed with MediaNama that TFS is laying off employees, while the person did not comment on exact number of lay-offs and details of the shutdown .
We will update the story when they respond with more details.
We checked TFS app in Mumbai which was still active but didn’t show any cabs from TaxiForSure. It however, prompted users to take an Ola Micro cab which would integrate the user’s details with Ola’s app.
The report added that TFS unit was being phased out since July 30th.
TFS assets were migrated to Ola: Following the Ola acquisition in 2015, TaxiForSure said that it is shutting down in 22 cities as an independent brand and is migrating TaxiForSure’s accounts to Ola. The company added that it is transferring all TFS credits back to the user’s bank account and all the promotional credits will be migrated to Ola Money. TFS was however operational as a separate brand in bigger cities like Bengaluru, New Delhi, Mumbai and Chennai for now.
The company was reportedly forced to sell after their fund raising plans crashed following a regulatory commotion in the aftermath of the rape of a woman by one of Uber’s drivers. The deal was considered the third largest merger in the Internet services space in India during 2015 (Flipkart and Myntra’s deal was the largest followed by Snapdeal buying FreeCharge).
Founders and top exec exits: After being acquired by Ola last year, TaxiForSure’s co-founders Raghunandan G and Aprameya Radhakrishna quit the company in late April 2015. Following the exit of founders, the company appointed Arvind Singhal as CEO, but he too left TFS in July last year. Pallav Singh, senior vice president of operations at Ola took over as CEO of TaxiForSure.
Ola funding: In November 2015, Ola raised $500 million from SoftBank Group, DST Global and China’s Didi Kuaidi among other investors for growth related activities and mobility solutions. SoftBank had invested $250 million in GrabTaxi in December 2014 and had also led a $210 million investment in Ola in October 2014.
Competition and regulatory tussle
However, Uber merged its China business into Didi Chuxing (earlier named Didi Kuaidi). Uber, however did not mention the financial details of the transaction, and whether Uber in China will remain a standalone app and business or be merged into Didi Chuxing. According to a report in Bloomberg, the combined valuation of the Uber-Didi entity was at $35 billion.
The Ken points out that the alliance effectively fell apart after Uber sold its China business to Didi and that it would provide ammo for Uber to dominate in India. What’s interesting is that Didi Chuxing is an investor in Ola, which is locked in a fierce and sometimes ugly battle with Uber, with Uber having taken Ola to court over false bookings, and Ola accusing Uber of being anti-national.
Apart from rising competition, cab companies including Ola have been facing regulatory issue in many Indian states. The Delhi Government said last week that it will make physical meters mandatory in all cabs (of online aggregators), despite a compulsory GPS installation. In April, the Karnataka government seized over 30 cars from Ola and Uber for charging their users over the government decided rate of Rs 19.5/km. The same month, it banned surge pricing as a part of its rules for online cab aggregators in the state. More on this here.
Ola’s full statement regarding the shutdown and lay-offs:
“The TaxiForSure (TFS) value proposition as an economy brand for customers, has been seamlessly integrated onto the Ola platform with the launch and rapid adoption of Ola Micro. TFS has contributed immensely towards Ola Micro’s success within a short span of time. Ola Micro has expanded to over 90 cities across India and accounts for the largest share of first time cab users coming onto any mobility platform. This has helped us achieve our objective of building an economy mobility offering for millions of users across the country. With all TFS driver-partners and customers coming on board the Ola app, the integration is now complete. As part of this integration over the last 18 months, we have achieved immense operational efficiencies, that have resulted in an improved experience for customers and driver-partners alike. In the course of the integration, we have absorbed as many TFS employees for open roles in Ola to support our growth. For positions that cease to exist as a result of this transition, we are offering enhanced severance benefits and outplacement services to help affected employees pursue new career opportunities”