Business

It's war between Ola and Uber

Bhavish Aggarwal, co-founder and CEO, Ola: File Photo: G.R.N Somasekar  

Bhavish Aggarwal, the Co-Founder of cab aggregator Ola, on Friday has described competition with the US-headquartered rival Uber as a “guerrilla war” situation with the American company “carpet bombing” as the local firm tries to defend its turf.

“With all due respect I am not saying its war type situation but this is corporate war and the competition between us and Uber is very intense.…the analogy that I give India is that this is like Vietnam war. We are the local guerrillas. We have the Americans carpet bombing us,” Mr Aggarwal said.

Speaking at an event organised by Tie, he said Ola will build relevant products and make sure that is sustainable, profitable and has a larger market share. The company, he said, will become profitable in the next two years. “We will go into the nooks and corners of the country and we will find those opportunities in the niche areas and in the large area…Even now despite competition we continue to lead the market… we have significantly improved our bottom-line over the past year or so and we have a very clear path to profitability.

He explained that globally the intense competition in ride share industry exists as there is an “irrational belief” that it is a winner take all business and there will be one guy standing in the end and that leads to an irrational exuberance from the investors also. “They pumped in a lot money into one company and the company throws money around into every geography it goes into. You might call this capital dumping, you might not. But the fact is money is thrown…,” he said.

Mr Aggarwal also equated the war Didi Chuxing and Uber war in China to World War-II. “But our industry is very very competitive and what happened in China between Uber and Didi was like World War 2…there were two people with lot of ammunition against each other and in the end one company won…in China there are only these large internet giants and the newer companies like Didi can stand on their shoulders...And the foreign competitor is actually at a disadvantage...India is not like that.”

However, when specifically asked about capital dumping, Mr Aggarwal, who had last year said that the government should design policies which will favour home grown companies, said it is for the relevant government agencies to decide what capital dumping is and what is not. “We are focused on building a business which is impactful.”

Asked about investor worries over return on investment made in Indian firms, he said the Indian internet ecosystem is going through an interesting phase. “Two years ago there was a lot of exuberance. I believe there was a little extra exuberance. As entrepreneurs we obviously liked that wave...In the past two years, the system has been going through a journey of building more relevant business models, building unit economics… an investor should definitely question companies on their return, their path to profitability… I as a company have not seen investors getting jittery unnecessarily.”


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Printable version | Jul 25, 2021 10:21:18 PM | https://www.thehindu.com/business/its-war-between-ola-and-uber/article17865567.ece

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