Ola, Taxi Driver

Ola is Spanish for ‘hello’ but those living in South Wales might soon be saying it when ordering a taxi. Confused? So will the cabbie. A new ride hailing service called Ola has chosen South Wales as the first region in the UK where it wants to take on Uber. Next on its list is a city, Manchester.

Although unknown in the UK the company is a big player in two other countries where it already serves 125 million customers in 110 cities. That’s some going for a company that was only set up seven years ago, but as one of those two countries is India – where the population is 1.324 billion – then grabbing even a tiny share of the market from Uber can bring in large numbers of passengers.

The UK follows India and Australia (population 24 million?) where it opened for business earlier this year. Compared to Uber, which operates in 600 cities in 65 countries, then its still a minnow, but clearly one on steroids.

Despite its apparent popularity, Uber’s growth has attracted a lot of criticism; not just from other cabbies  – many of whom have had to spend years ‘doing the knowledge’ and still face close scrutiny from licensing authorities regarding the roadworthiness of their cabs  – but also from tax authorities (Uber’s drivers are self employed so the company pays no employment taxes) and more recently, groups concerned about the safety and welfare of the passengers.

Ola’s management has not been deterred by all this negativity and it clearly sees Uber’s tarnished reputation as a chance to build their own. In fact, the CEO was quoted on the BBC news website as saying, “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”. As an example of PR spin then that statement is surely pure gold.

But does South Wales, followed by Manchester and then the rest of the UK actually need another taxi service? Current taxi drivers would probably say no and who can blame them. Each new market entrant simply drives prices down forcing them to spend increasing amounts of time in their cabs to make up the lost income. And those long hours are not conducive to their health or their passengers’ safety.

Of course, South Wales’ cabbies could just play a waiting game. (After all, they’re used to waiting). Despite its enormous population, the Indian market is intensely competitive and the company admits to having lost $700 million last year largely spent on marketing against Uber. Whether that level of losses is sustainable in the long run is surely debatable.

 

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