Ola, the company battling Uber in India, has confirmed today that it has shut down TaxiForSure, a rival it acquired for $200 million last year, after it integrated its services.
Economic Times reported today that Ola shuttered TaxiForSure, shedding at least 700 jobs in the process. TaxiForSure, which was focused on budget rides, had 1,700 staff at the time it was purchased, but many, including its former CEO, have long since departed.
While it didn’t reveal how many staff have been let go, Ola said in a statement that it would offer benefits for “positions that cease to exist as a result of this transition.”
“With all TaxiForSure driver-partners and customers coming on board the Ola app, the integration is now complete,” Ola said.
“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,” the statement read.
An integration of TaxiForSure was always inevitable, but Ola never went public with its plans after buying the company. Back last summer when TaxiForSure services were first integrated into the Ola app, Ola told us that the TaxiForSure service had a future and that it would leverage both apps to increase their respective userbases.
There could, of course, be an ulterior motive at play here. Uber is increasing its focus on India — and Southeast Asia — following the sale of its business in China. Ola has been rumored to be fundraising since June — before Uber exited China — and now that its deep-pocketed rival is doubling down on India, Ola may be taking a look at its own operations more closely and making changes to remain more competition and, crucially, more capital efficient. In that respect, migrating TaxiForSure’s primary assets — drivers, customers and some staff — makes more sense than keeping two companies going. Mint’s report suggested the integration and closure of TaxiForeSure will save Ola around $4.5 million per month.
It isn’t doom and gloom for Ola necessarily. While Uber is expected to increase the competition, most data points suggest Ola is leading the U.S.-based firm in India.
Ola got an earlier start on the market by launching its service before Uber arrived in August 2013, and its lead may also be down to the sheer breadth of services that it offers. Earlier this year, Ola — which counts SoftBank among its investors — claimed that its ‘Micro’ vehicle service alone is bigger than Uber, covering 75 cities and over a million daily rides.
