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Ola shuts down TaxiForSure operations, close to 1000 employees shown the door

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Roughly a year and a half after acquiring local ride-hailing rival TaxiForSure, Ola has delivered the final blow and shut down the company’s business, according to people close to the development. And what’s even worse, reports suggest that over 90 per cent or 700 TaxiForSure employees have been booted in this restructuring process.

As you may already know, Ola had been silently shifting and merging the former’s business into its own operations post acquisition. Starting with the integration of super-cheap hatchback rides under TFS banner into its own app, Ola at a later stage migrated the same service to its platform in the form of Micro rides. Around the same time previous year, it had also shut down operations of TaxiForSure as an independent brand in 22 cities across the nation.


The sources(six anonymous former and current Ola employees), however, now suggest that the largest Indian ride-hailing service has completely phased out TaxiForSure’s business and this came into action internally starting 30th July. In a crunch to reduce burn rate and eye profitability, the company has shuttered TFS and moved all the driver to its own platform. The company, of late, has also been prompting TFS users to migrate to Ola app for a better service, drivers and experience.

In an electronic statement received by The Tech Portal, Ola says,

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.


On the other hand, the company has also resorted to lay-offs to reduce spending on human resource and personnel. Out of the overall 1,300 strong team that had joined Ola with the hopes of being part of the largest cab aggregator, only a meager 250 odd pupil have made the cut. Some of the executives including the CEO had previously left the company in search of better opportunities.

The aforementioned lay-offs had been feared since the recent closure of its two offerings – Ola Cafe and Ola Store, its food delivery and hyperlocal delivery services. Most of the lower and middle level employees are being retained, while high-level managers hired from premium B-schools are being let go, reports TechCircle.

The personnel being laid off from the company work in varied operations such as call centres, driver relations and business development and are located across a dozen cities across India. These employees are being offered three months’ salary as compensation.

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.

the company adds in a statement received by us.

Ola, however, has not let TaxiForSure’s acquisition go to vain, if you’re by any chance thinking that. It has already managed to integrate the tech and human resource teams from the two services, while also keeping the driver relations and call centre teams separate.

One of the sources concluded talks on the following note:

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.

Restructuring+Management Exodus

Also, in a bid to take on the largest American startup, Ola had been laser-focused on restructuring its business model to lay emphasis on the core taxi business. It has decided to channelize it’s investments primarily in eight major cities, including Bengaluru, Hyderabad, Chennai, Delhi-NCR, Mumbai, Jaipur, Pune and Kolkata, where it competes directly with Uber. Ola gets about 90% of its revenue from those eight major cities.

In addition to restructing, the cab aggregator has also been having a hard time retaining its senior level management executives. Earlier this year, two senior executives — Pradeep Dodle, head of cab management and Harsha Kumar, associate VP of products have also quit the company.

The consolidation and restructuring of business seems to be becoming a patent outlook for startups in the Indian ecosystem. Ola isn’t the only one plagued with the problem of growth-stage fund raise, restructuring and management shuffling. There’s another major but former Indian unicorn that has been suffering with the same problems but at a larger scale. Flipkart, as you may recall, has suffered multiple valuation markdowns, multitude of senior level management changes and recent drought of funds. It has also resorted to organisational restructing and massive layoffs in the process to reduce cash burn and as they say, eye profitability to compete with a Western rival — in this case, Amazon.

Heating Competition

It’s just as the sub-heading says, my friends! This move by Ola comes at a time when the ride-hailing war in India is sure to intensify in the upcoming months. With Uber losing a key market in the form of China and selling it’s business in the country to local rival Didi, the American ride-hailing service now has surplus funds that it’s ready to pump into its India operations.

But, one shouldn’t underestimate Ola because recent reports suggest that the cab aggregator had raised $57.3 million (about 384 crores) from Vanguard Group. This was in December last year, just a month after its $500 million funding. And in the light if recent turn of events, it is in talks with existing investors, Didi Chuxing and SoftBank Group, for a new round. It may later add more funds from new investors as well like it did earlier.

With Kalanick bringing in the cavalry to tear down Ola, and Aggarwal not ready to get down off his high horses, the only thing left to see is — who will survive and emerge victorious after the ongoing battle for the Indian ride-hailing market?

A hands-on guy fascinated by new apps, technologies and enterprise products.

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