Vishal.

J ,MBA 1st year , Bharat Institute of Higher Education And Research

Success Story of a Start-up – A Case Study of OLA Cab

ABSTRACT
"Start-ups don't die, they commit suicide. In other words, 90 percent of start-ups fail because the founders get
bored, discouraged, or something else, and they move on to other things, not because of some catastrophe. No
matter how dark it is today, things will always better tomorrow." -- Justin Ken, Justin.TV.Startup businesses have
always played an important role in the global economy, but recently their importance has grown significantly.
For this reason, governments around the world have amended regulation and created incentives to encourage
their development. However, statistics shows that startups have an extremely high mortality rate, often due to a
lack of strategic planning, wrong marketing investments or inefficient resource allocation. This paper is the
success story of an Indian startup, Ola Cabs. As the competition in the Radio Taxi market is increasing at a very
faster rate where several brands are providing cabs to the customers as per the requirements, this paper is
designed to study the success story of Ola cabs which has the greatest market share and provides services in an
efficient manner along with customer satisfaction.

Introduction
Managing and growing a successful startup is ripe with challenges from all sides – from keeping
employees and investors happy, to raising money and constantly improving your bottom line.Not every start-up
is bound for success. In actuality, getting money from an investor is no easy feat, but when you know what states
are the most investor friendly, what investors are looking for and how to build a powerful team around your
organization -- then you are much more likely to find start-up success.OlaCabs, more popularly known as Ola, is
just like any other marketplaces online, but more specifically into providing Taxi services. Ola, which started as
an online cab aggregator in Mumbai, now resides in the Silicon Valley of India a.k.a. Bangalore, and is also known
to be one of the fastest growing businesses in India, out-beating its competitors Uber & Meru. Coming back to the
man behind Ola; simple yet charming Bhavish, with the success of his prodigy has certainly become the talk of
the town.

Taxi Services in India

The middle class population in India rose from 15 million in 1991 to160 million in 2011. This segment
with its increasing disposable income started demanding and has been willing to pay for better servicesacross
sectors including private and public transportation. Rapideconomic growth coupled with huge infrastructure
development,rigorous effort from Ministry of Tourism to project India as traveldestination and emergence of
Business Process Outsourcing (BPO)industry has given a huge push to the car rental industry in India. Till2003,
the point-to-point taxi market in India’s big metropolitan citieswas completely unorganized. It was served either
by unorganized, inconsistent and somewhat expensive private operators or by state government controlled prepaid
taxis offering a standardized but low-quality service.

Indian Taxi Market:

The taxi market scenario in India is hugely fragmented. The taxi market in India is divided into two major
segments which are the organized and unorganized markets. The unorganized market has a market value of $8.5
billion and the organized market holds a market value of almost $500 million. The organized sector is the recently
emerged segment in the market scenario. It is further classified into owners, affiliates and aggregators. The owned
vehicle segment is inclusive of the pure car rental companies like meru. The affiliates are accomplished with
multiple car rental agencies and they are known to provide different tour packages or deals. Whereas the
aggregator are the newest phenomenon which are driven by start ups like ola cabs.

Market Share of IndianTaxi Market

7%

23% unorganized
affiliators
aggregators
60%
owners
10%

Due to the increase in competition and a steep rise in public demand due to the quality and comfort of
service provided by these taxi services there has been an increase in the investment activity for the same. In the
interim, big cash is making this fight worth battling for. As indicated by the Association of Radio Taxi India, the
taxi business in the nation is developing at 20 to 25 for each penny a year.

LITERATURE REVIEW

OLA – Company profile:

Ola initially started off as Olatrip.com a small website venture that offered weekend trip packages. It was
started as a startup business by two IIT Mumbai graduates Bhavish Aggarwal and Ankit Bhati. Bhavish worked
for Microsoft after college for almost two years and then started a small website to sell online tour packages. Due
to a bad experience during a car rental situation they decided to mend the system of car rental and this became the
basis for the initiation of Olacabs. Olacabs are now referred as Ola. Ola is a Spanish term which means hello! This
indicates that hiring a cab at Ola as well as the services provided are easy and friendly as conveying hello. Ola
cabs were founded on 3 December 2010 by Bhavish Aggarwal and Ankit Bhati. Initially Ola operated from
Mumbai as a taxi aggregator service. Now it has shifted its head office at Bengaluru and works efficiently from
there. Since Ola received its first investment there has been no looking backward for this initiative venture. Until
the year 2014, the company had expanded to a widely distributed network which comprised of 200,000 cars across
85 cities. These 85 cities include all the metropolitan cities and various important cities in it. During November
2014, along with car rental scheme Ola also tried to incorporate autos on trial basis in Bengaluru.
 INVESTMENT IN OLA
investment in ola

45,000,000
40,000,000
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0

Swot Analysis:
A brief idea about the position of the company in the market can be estimated from the SWOT analysis which
indicates the respective strengths, weaknesses, opportunities and threats faced by the company.
Strengths:
1. Ola is first of its kind taxi aggregator service provider in the country.
2. It achieved the no.1 rank in the sector after acquiring Taxi for sure.
3. The services offered by ola are well appreciated by the public
4. TV, online and print media marketing has helped to create awareness about the company.
5. Increase in customer base due to strong network effect.
6. Financial condition of the company has improved after investments by various firms.
Weaknesses:
1. Brand image can be easily influenced by the misbehavior of the drivers as they are the ne in direct contact
with the customers.
2. Monetization becomes difficult due to the demand.
Opportunities:
1. There is a huge potential for the company to penetrate deep into the market as the unorganized market hold
almost 85% of the segment.
2. As Ola coordinates through the smart phone app, increase in number of smart phone users provides them with
a great platform to increase their customer base.
3. Disposable income can be increased.
4. Convenient services create huge demand among customers.
5. Acquisition of smaller company of the market.

Threats:
1. Increasing competition
2. Heavy usage of cash to attract customer due to strong financial root of Uber.
3. Presence of competitors at the national level.
4. No specific regulatory body of the government.
5. Customer loyalty is rare in this segment.

RESEARCH METHODOLOGY
Research Setting
In order to test the aforementioned hypotheses, a quantitative study was conducted at one of the largest
public universities in Malaysia whose respondents comprised a mixture of local and international students. The
respondents were chosen because of their easy access to several online food ordering companies operating nearby
such as Pizza Hut, McDonald’s, Domino’s, Nando’s, Papa John’s and Room Service Deliveries.
 Data Collection
The questionnaires were distributed to 600 undergraduate students of the Kulliyyah of Economics and
Management Sciences requesting them and their friends or family members who had experienced ordering food
online to participate in the research project. Using a questionnaire is the most economical method of data
collection, allowing for wide distribution and is best suited to handle complex questions.

Measurement of Research Variables

All constructs were measured using multiple items, 7-point Likert scales ranging from strongly disagree to
strongly agree. Website quality consists of four scales namely information quality, website design, security and
payment system. Information quality will be evaluated from three dimensions: information accuracy, information
comprehensibility and information completeness. These dimensions were adapted from the items initially
developed by Jeong et al.(2003) and Muylle et al. (2004). On the other hand, website design will be evaluated
from four aspects: navigation, colour combination and ease of use.The survey instrument consists of two sections.
In the first section, respondents were requested to rate their agreement on statements related to their latest online
food ordering experience. Each item was measured on a 7-point Likert

DATA ANALYSIS
. This study comprises three sections of data analysis. The first section is descriptive analysis based on the
demographic information of the respondents. The second section discusses the validity of the research variable
based on the confirmatory factor analysis. Lastly, section three analyses structural equation modelling and test the
hypothesized relationship.

Demo graphical Profile of the Respondents

The study generated usable questionnaires which resulted in a response rate of 58.8%. Table 1
summarizes important demographic characteristics of the respondents.

.children, 11.3 percent of respondents have one child, 10.8 percent of respondents have two children and
21.8 percent of respondents have three or more children.
Conclusion
Ola has seen a tremendous growth in the taxi market sector. There is surely no looking back for Ola as it
is improving day by day in every prospect. Revenue of Ola has increased almost 10 folds over the past four years.
Today, it is the largest cab service provider in the country. Ola has successfully achieved public support and has
created a buzz about its brand in the market. Furthermore if some more technological advancement is done at Ola
then the customer base can be increased by providing better experience to the customer. Ola now has shifted its
focus on target markets and is focused on providing desired service to the people in the target market. The
economic segregation depending upon the income group and requirement of the people is well appreciated. On
one hand Ola promotes its brand by traditional methods and on the other hand it also uses the modern techniques
of promotion. At the same time it does not forget to highlight its name in social safety, creating social awareness
and promoting acts of humanity. The key element in making Ola a successful brand is the efficient and quick
accessibility which is offered by the firm. The firm not only improves through its intense promotional activities
but also due to the services and comfort offered to users and employees.
Ola is making you sluggish. A single tick gets you a taxicab. Habits are less demanding to develop when the
change required in conduct is minor. What's more, once a habit is shaped, it’s difficult to backtrack.
So OLA has been and will be a great technology platform for transportation and offering flexible options of
booking and payment to customers and flexible timings and facilities to drivers. And shortly, we are going to
experience a big boom and great facility of getting our grocery delivered to us with ease. Kudos to the idea of the
founders and something more to make us proud is that it has been started in India by two genius Indians.

References
[1]. https://www.olacabs.com/info/about_us
[2]. http://www.ciim.in/ola-cabs-business-strategy-case-study
[3]. https://yourstory.com/2014/06/ola-taxiforsure-uber/
[4]. https://techstory.in/olacabs/
Vishal j