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Ola spreads wings in Australia to build profit base, take on Uber in India

Alnoor Peermohamed/Bengaluru 12 Mar 18 | 12:45 PM

Homegrown ride-hailing major Ola has launched its operations in Sydney, its second market in Australia, as it looks to tap more developed markets to build a profit base to take on rival Uber at home.

Ola had kicked off its service in Perth last month after signing up over 7,000 drivers on its platform there. The company is now looking to expand into more cities in the country which is said to have among the most open regulations for ride-hailing services globally.

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As part of its launch in Sydney, Ola said that it has hired a local team which will support its driver partners. It said that drivers for Ola will get training to use its technology and how to increase their earnings via the service.

“We’ve been very pleased with how the service has been received by customers, driver-partners and the community in Perth, and can’t wait to continue building on these experiences and learnings for our second city launch," said Chandra Nath, Vice President and Head of International business at Ola, in a statement.

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Business Standard had first reported on January 9 that Ola was planning to enter overseas markets of Australia, New Zealand, Sri Lanka and Bangladesh as it looked to follow rival Uber’s model of global expansion. The company picked Australia as its first overseas market as it is eyeing profits which will help offset some of the losses it makes back home.

For now, the company is focused on winning over customers and signing up more drivers. Ola has planned promotions which will be used to get some ride-hailing customers to switch over to its service, while its biggest promise to drivers is better earnings, support and discounts on fuel through partnerships.

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Uber is the largest ride-hailing player in Australia, and has been able to edge out local rivals such as GoCatch. While the US ride hailing giant is present in 18 cities across Australia, experts say the market continues to be underserved unlike other developed markets in the US and Europe. This gap has allowed the entry of Ola and Estonian ride-hailing start-up Taxify which counts China’s Didi Chuxing as an investor.

Ola had initially announced that it would focus on Perth, Sydney and Melbourne for its expansion into Australia. The company usually sets up market research teams in cities prior to its entry and apart from Australia is said to have such teams in Colombo and Dhaka in Sri Lanka and Bangladesh respectively. 

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