Popular cab service Ola has reportedly shutdown TaxiForSure (TFS) as it intends to reduce the cash burn in an intensively competitive market. Although the company has refused to divulge any details on the number of employees losing their jobs, it is estimated that 500 – 700 jobs will be cut.
An Ola representative who refused to be named said,
“For positions that cease to exist as a result of this transition, we are offering enhanced severance benefits and outplacement services to help the affected employees pursue new career opportunities.”
Most of the job cuts will be confined to support services and business development departments.
Ola had acquired TaxiForSure in 2015 for roughly $200 million in a bid to eliminate competition and consolidate its position as the market leader. Ola also roped in auto drivers to expand its reach to every nook and corner of the selected cities. But, as globally renowned taxi service Uber upped its game with popular offers to lure customers, trouble only worsened for Ola.
Uber is aggressively pursuing the Indian customers after it hived off its China business to Didi Chuxing, and plans to invest roughly $1 billion in India. The taxi ordering service via apps is a relatively new concept in India, and banking on the nation’s tremendous growth potential, the companies are putting their immense faith and enormous amounts of money to become the leaders. Both Ola and Uber are striving to gain the maximum market share even as they bleed cash on a daily basis. It is from the generous support of the institutional investors that they are operating and expanding in India.
A replacement for TaxiForSure can be seen in Ola Micro – the low cost AC cab service launched in the first half of 2016. The service is an instant hit with customers and has expanded to more than 90 cities and counting.