SoftBank-backed ride sharing unicorn Ola halves FY19 losses
Ride sharing unicorn Ola’s losses narrowed by 57% amidst several media reports about employee layoffs ahead of its reported public market listing.
The Bengaluru-based company’s losses narrowed to Rs 1160.27 crore or Rs 583.03 per share in the financial year ended March 31, 2019, from Rs 2676.70 crore or Rs 1346.91 per share a year earlier.
Ola’s financials also showed optimisation efforts over its costs in the reported financial year, with total expenses reducing by 27% to Rs 3315.48 crore. Advertising promotional expenses were reduced by 60% to Rs 153.81 crore.
Revenues grew 16% percent to Rs 2155.21 crore.
The company’s revenues from its primary operations of ride sharing services is sourced from commissions that it charges from every transaction made between the driver and user using its app. No standardised rates exist for the regulation of these commissions.
However, the Indian government is looking to restrict commission rates charged by cab aggregators such as Ola to 10%, according to reports by Reuters and the Economic Times, citing separate sources.
Such a rate would make a stark difference in the revenue models of major ride sharing companies such as Ola and Uber that are known to charge haphazard commissions of anywhere from 20% and 50% based on in-house algorithms that take several factors into consideration.
There has been several changes reported in the recent past over restructuring of operations at ANI Technologies, the parent holding entity of the ride-hailing operations. The reports about restructuring moves come ahead of the company’s reported market debut in the next 18-20 months. A group of employees is being moved to adjacent businesses, including Ola Electric and Ola Financial Services. It is also stepping up its governance and compliance processes.
The company did not respond to queries from TechCircle on the reported layoffs.