India’s largest taxi-aggregation service provider Ola, has today announced a first of it’s kind cab leasing program for driver-partners in India, which will operate as a fully-owned subsidiary under the company. It also announced a dedicated capital allotment of more than Rs. 5,000 crore to scale up the cab leasing business in coming years.
Initially, the company will invest Rs. 500 crore and will raise funds from its subsidiary when required. This program will provide flexibility to drivers for leasing a car for a minimal initial deposit and monthly lease payments with an option to own the vehicle after a period of 3 years.
In this program, Ola sees a tremendous opportunity for hundreds of thousands of drivers to turn entrepreneurs in the long run while giving them instant access to a stable income.
The pilot project of this new leasing service is already working in Bengaluru, Chennai, Hyderabad and three other cities. Majority of the vehicles for pilot project were sourced from Maruti Suzuki.
Ola is already in advance talks with some of the leading car manufacturers and financial institutions to kickstart this model. By the end of 2016, it is aiming to have more than 1,00,000 driver partners under its car-leasing subsidiary. By December 2015, it plans to get at least 10,000 cars under this leasing model.
The driver will have to pay a minimal joining fee of Rs 35,000, which is significantly lower than the down payment required for availing a loan. The monthly lease rental will cost Rs 15,000, which also includes routine maintenance costs of the cab.
The leasing business of the company will be headed by Rahul Maroli, who recently joined Ola as Vice President- Strategic Supply Initiatives. He has experience of over 13 years in the leasing space as he was part of the senior management team at LeasePlan, one of the biggest vehicle leasing and fleet management company across the globe.
Bhavish Aggarwal, Co-founder & CEO, Ola said in a prepared statement,
Through key partnerships with financial institutions and car manufacturers, Ola’s subsidiary will be able to bring in additional high quality supply to address the unmet mobility demands of millions of users in the country.
On that note, I’m also very excited to bring on-board Rahul to lead the leasing business for Ola’s subsidiary. His rich experience shall help us scale this business rapidly and in making this first of its kind program, an industry benchmark.
Ola, which was founded in 2010 by Bhavish Aggarwal and Ankit Bhati, is looking to evolved from just a cab aggregator to a more diversified mobility business. Other plans under its diversification model include its hyperlocal delivery service with the launch of its “Ola Cafe” mobile application. Recently, the company entered payments market with its Ola Money wallet service.
Ola, just yesterday raised a massive $225 Million round, which is in turn a part of the larger $500 Million Series ‘H’ round.