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Ola to restructure, Centre may cap commission for aggregators
Ride-hailing major Ola is undertaking a restructuring exercise ahead of its planned IPO and the move could impact up to 250 roles, according to sources.
The company, which has been focussing on profitability along with building up scale as it expands into international markets, will accommodate some of these employees in other business units like food, electric and financial services, sources close to the development said
When contacted, an Ola spokesperson said the company’s “organisational redesign aims to right-size all our operations as well as leverage skills sets and experience of mobility employees in available positions in new business verticals”.
The spokesperson, however, did not comment on the number of employees that could be impacted by the exercise.
Ola is estimated to have about 4,500 people on its payrolls. “The resultant working model will form the foundation of the next chapter in Ola’s growth journey as the company continues to grow its businesses. We also continue to attract the best talent across the board to support our growth and ambition,” the spokesperson said.
The spokesperson added that the restructuring is aimed at becoming “more nimble and have a sharper focus on growth and profitability”.
The development comes at a time when Ola, which is locked in a battle for market leadership in the Indian market against American rival Uber, narrowed its standalone losses in FY19 to Rs 1,160.27 crore from Rs 2,676.70 crore in the last financial year.
ANI Technologies (which runs Ola) saw its total income rising close to 16 per cent to Rs 2,155.21 crore in FY19 from Rs 1,860.61 crore in the previous fiscal, as per regulatory documents filed with the Corporate Affairs Ministry.
Its employee benefits expense has been lowered to Rs 413.83 crore in FY19 from Rs 495.69 crore in FY18.
Uber, Ola set to face limits on commissions
Plans are afoot to cap the commissions app-based taxi aggregators such as Uber and home-grown Ola earn on rides to a maximum 10% of the total fare, according to a draft proposal seen by Reuters, a move industry experts warned would hit revenue and operations.
Such a law would be another blow to San Francisco-based Uber after the ride-hailing firm was stripped of its licence to carry paying passengers in London for the second time in just over two years over a “pattern of failures” on safety and security.
India’s federal government has proposed reducing the commission from the around 20% of the total fair charged at present, according to the 23-page document titled “central guidelines for aggregators”.
The Centre has also proposed stricter safety checks for drivers and wants to cap their working hours at 12 per day.