Despite some of the same financial backers, Ola and Uber will now be competing for the same prize: ride-hailing app supremacy in London.
Indian ride-hailing app Ola recently announced plans to launch its services in the UK, taking its battle with Uber to British shores.
Ola is now looking for drivers in Cardiff, Vale of Glamorgan, Newport and many more towns throughout South Wales and Greater Manchester. In a statement, its said they plan to expand nationwide by the end of the year.
To lure drivers to its side, the company claimed it will serve both private cabs and black taxis, taking 10 percent of each private fare and five percent of every black taxi fare. Both of these figures are less than what Uber currently takes from drivers.
The company, founded in 2011 by Bhavish Aggarwal and Ankit Bhati, is dominating the Indian ride-hailing market, serving an estimated 125 million customers across 110 cities in India. It expanded to Australia in February and now have 40,000 drivers on the road in seven Australian cities. Despite its success, Ola is one of many ride-sharing and ride-hailing apps seeking to dominate a variety of markets across the world.
Ola is hoping to enter the UK market on good terms with every side, cajoling strict British regulators with offers to meet their every need and assuaging established taxi drivers with a plan to allow both private cars and traditional black cabs to use its app. The company said it wants to provide 24-7 voice support, an Ola app emergency feature, and stringent screening for drivers.
"Ola is excited to announce its plans for the UK, one of the world's most evolved transportation markets," said Ola founder Bhavish Aggarwal.
"The UK is a fantastic place to do business and we look forward to providing a responsible, compelling, new service that can help the country meet its ever demanding mobility needs."
While not explicit, Ola's focus on compliance with regulators is seen as a subtle jab at Uber, which is currently in the middle of a vicious court battle with London over how its business operates and treats drivers. It recently won a court appeal, allowing it to operate in London for about 15 months. Uber has been in the country for years and now has 48,000 drivers serving millions of people each month. But Uber is also particularly despised by drivers of black cabs, who have to spend years securing a license before they can legally operate.
Ola's announcement comes on the heels of meetings held between Aggarwal and London's Director of Transport Innovation Michael Hurwitz last year. The London market is already crowded with apps despite pressure from politicians and courts to treat them as employers instead of just service-based apps. A number of apps rivaling Uber have had discussions with the city about gaining licenses to operate in the city.
Despite pledges for reform, drivers in India have protested against both companies, saying their practices are abusive and often arbitrary. In March, drivers in New Delhi, Bengaluru, Hyderabad, Pune and other towns protested against Uber and Ola, saying the wages they made were impossible to live on and that both companies were often assigning random "fees" that cut into driver profit.
The move to the UK opens up another front in the battle between Uber and Ola despite sharing a major investor. According to Business Insider, Japanese tech company Softbank has invested heavily in both companies, promising Ola $2 billion last October and securing a 20 percent stake in Uber earlier this year.
There were even rumors that Uber and Ola would eventually join forces in India, as both apps were suffering losses in the fight against each other. Uber recently pulled out of Southeast Asia entirely, handing its business, along with Uber Eats, over to Singaporean ride-hailing app Grab before taking a 27.5 percent stake in the company and having its CEO, Dara Khosrowshahi, join the company's board.
Analysts expected Uber to continue pulling out of markets and securing partnerships with locally dominant ride-hailing apps, but Ola's decision to enter the UK market kicks off a new round of the fighting between the two.
Aggarwal told a conference last month that Ola, which is now valued at around $7 billion, would go public in the next three to four years, and today it secured a $225 million stake purchase by Singaporean bank Temasek.
"The ambition for both me and [fellow co-founder] Ankiti [Bhati] has always been to build a sustainable, long-term independent institution," Aggarwal said.
"In that direction, we are definitely going to IPO. Our goal is to aim for an IPO in about three to four years. We are on that path, our focus on building a sustainable business model [and] a profitable business builds into that ambition."
*this article was featured on Download.com on August 8, 2018: https://download.cnet.com/blog/download-blog/uber-competitor-ola-launches-in-uk-as-ridesharing-competition-heats-up/