Ola has today officially announced the launch of its new service named Ola Micro. It is a low-cost service, priced at a paltry ₹6/km, cheaper than company’s own TaxiForsure offering. The service is also aimed at taking on UberGO — priced at ₹7/km.
Ola Micro is being launched in seven cities of India, which includes Mumbai, Delhi and Bangalore among others. The launch is confusing though. However, with its TFS acquisition, Ola already had a ₹7/km offering, thus making reasons behind Ola Micro’s launch unclear.
UberGo however, has a lower base fare and a higher minimum fare than Ola Micro. It means that for a usual two to four kilometer drive, UberGo would be slightly less expensive than Ola Micro, while for more than four kilometers, Ola would be cheaper.
Ola Micro has a minimum fare of ₹40, a per km charge of ₹6 and a per minute charge of ₹1, while UberGo has a base fare of ₹40, a minimum fare of ₹50, a per km charge of ₹7 and a per minute charge of ₹1.
The company has revealed that the car models under Ola Micro will include the Hyundai Eon, Wagon R and Datsun Go. Initially, the service will be available in Delhi, Mumbai Kolkata, Bengaluru, Chennai, Pune and Hyderabad.
Ola claims that it has over a 70% market share in India with presence in over 100 Indian cities. On the other hand, Uber is currently operating in 26 cities in India.
The company is currently focusing on growing its business rather than making profits, says Ola’s chief finance officer Rajiv Bansal. He further says that:
The price war will go on or as long as it takes. That is not an issue for us. We are solving a real problem here and there are only two key players in such a huge market.