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Today we are discussing on Taxi business model like Ola business and revenue model and how it works. Before that, we discussed on online food ordering business model mobile app. Future work technologies we serve in every industry for example, food and restaurants industries, on demand economy services, online shopping and E-commerce industry and hotel or hospitality industry. We create iOS and Android mobile application for every business and develop a website. If you also want to run taxi business like Ola and want to create an app like Ola this article will help you. Read it about Ola business and revenue model and its working.

Ola business and revenue model

How does Ola cab Make Money was the big question of choice many people had when Ola produce great amounts of venture capital at its whim, Ola is that blue eyed boy of the Indian startup Eco-system that Zomato once was. Lets move on to the Ola business and revenue model now.

About Ola, Facts, Funding, Funders and Founders

ANI Technologies Pvt Ltd is the name of the organization under which Ola App working. It’s head office in Bengaluru, India. Ola is basically an On-Demand” Taxi Hailing Service using which people with smartphones can book a chauffeur driven cab in a driven by owners or helps of the owners of the cars. As of Last Fund Raise the company was valued at over 5 Billion USD.
One interesting thing to note is that in Ola business and revenue model, Ola Cabs used to operate as a Fleet Cab Service Provider during its starting days, it used to work like this : You call upon their call center, tell them the time and date and of the trip and get a car at your front of the home, you had to pay in cash to the taxi driver when the trip ended, then it pivoted to app based aggregation model seeing the meteoric rise of Android and Apple Devices.
• Ola Funding- Appx 1.5 Billion USD. (as of December 2015)
• Ola Founders- Founded in 2010 by Bhavish Aggarwal & Ankit Bhati
• Valuation- As of Dec’ 2015: Appx 5 Billion USD

Ola Business and Revenue Model

Well as stated earlier, Ola has been through its own set of ups and downs, pivots and U-Turns with respect to (wrt) its Ola Business and Revenue Model. When they began; they started out as a Taxi Rental Fleet Business (They possessed the Fleet). They had a call center which used to do bookings for customers who wanted cabs. Pretty similar to Meru Cabs and others (Basically Radio Taxi but unbranded and available on an 8hr 80 km kind of billing). But later on they pivoted into an app based cab aggregation service (similar to Uber) and the rest is history. Their revenue model is pretty similar to Uber with couple of additions to it. Lets move on to it by first understanding How Ola Works.

How does Ola Work

Customers to Open Ola App; Ola auto detects your Location via Phone’s GPS; Shows Cabs of Various Categories (Mini, Prime, Sedan, State Transport Taxis & Ola Share etc) Nearby; Customer to click on a Category of Choice; Tap on Ride Now; Request is routed via Ola’s Servers and is prompted to the Ola Cab Driver’s Mobile Phone (if he is logged into the Ola Driver Application); If the taxi driver accepts the ride, you get confirmation message on your mobile screen with all Driver Details; Driver details sent to you on message and email; you click to call the Driver and Co-ordinate Complete the Ride; Money Debited from your Ola Money Wallet.

Business Model of Ola

The most significant contributor to Ola Cabs Revenue Model will be “X% Commission from the total Fare of the Trip e.g. Ranges from 15% to 20% depending on the city and type of vehicle. Here is the list of various (current and discontinued) Revenue Lines the company has.

Please Note: There are 2 Apps being used simultaneously while the trips are coordinated at Ola – One is used by the Cab Booking Consumer (i.e. You) what’s more, the other individuals is utilized by the Request Completing Taxi Driver called User Application and Driver App separately Hereon.
Revenue Lines of Ola
• Fleet Management via Tele Sales
• Percentage Commission from Trips being served through its platform (Trip Based Commissions)
• Money Wallet in Ola app
• Ola Cafe (Food Delivery)
• Ola Store (HyperLocal Grocery Delivery)
• Corporate Tie Ups / Event Tie Ups
• Vehicle On-Boarding Fee
• In-Cab Advertisements
• Fleet Leasing (To Drivers)
• Car Type
• Peak Time Charges

Trip Based Commissions

In Ola business and revenue model client utilizes Ola User Application to book escort driven taxicabs on the grounds that it is possible that they don’t possess an auto or they would prefer not to utilize their own particular auto for any reason. Which so ever driver acknowledges the demand is given the area and subtle elements of the client to be gotten? Once the driver achieves the goal (in the wake of dropping off the client) he needs to obligatorily tap on “End Trip” blazing on his gadget’s screen. When this is done, the clients payment is done through Ola Money Wallet (Pre-paid) or by means of Cash to the Driver.
P.S. The Customer can either click on Ride Now or Ride Later (pre-schedule cabs as per desired date and time).

The Trip fare is a combination of:

• Travel Time (In Minutes) : Ola charges every Minute of Travel Time following an underlying free X minutes
• Distance Cost: Ola charges Per KM of Travel after an underlying settled admission Distance (shifts according to the sort of taxicab)
• Waiting Time: on the off chance that you influenced the driver to hold up, extra holding up time charges are imposed to you
• Service Tax on the aggregate trek charge
The Trip fare once charged to your ola money wallet is credited into the driver’s account under the head of the trip number given to you in your bill copy if paid via cash then equivalent amount of cash is deducted while making payment to driver for the conducted trips.
Ola deducts the Service Tax charged to consumer first, then its commission percentage, then applicable income tax on the balance amount and remits the rest of the amount to the drivers bank account at regular intervals (3-7 Days )
• Assuming Travel Cost Per Minute : 5 INR (Travel time 40 mins)
• Travel Cost Per KM : 15 INR
• Service Tax : 14.5%
• Total Travel : 30 KM, (First 5 KM @ 100 INR)
• Total Fare : 100+ 40*5 (Assumption 1) + 25*15 (Assumption 5 & 2) = 100+200+375 + = 675 + 14.5% of 675 (ST) = 675 + 98 = 773 INR
• Ola;s Commission : 675 * 20% = 135 INR + 98 (ST – Payable to Govt)
• Driver’s Payout : 773 – 135 – 98 = 540 INR Less 10% TDS (As per Income Tax Act) = 486 INR.

At the End!

So, here we explained Ola business and revenue model and its working. If you are looking for iOS and Android mobile app developer or website development expert team for your dream app in iOS and Android or website then get in touch with us and know how we can help you own the next technology master piece

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2 Replies to “Ola Business and Revenue Model | How it Works”

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