Indian cab-hailing firm Ola is all set to launch a ‘self-drive’ service in order to widen its portfolio of transportation solutions and for same the company will invest over $500 million to deploy over 10,000 vehicles including luxury Sedans and SUVs, reported Economic Times, citing two people directly aware of the company’s plans.
An Ola representative has confirmed the company’s plan to enter
self-drive rental offering, said the ET report.
Ola will launch the service on pilot basis in select cities and the service will be available in various formats such as rentals, subscription and corporate leasing. Ola’s self-drive car rental service will be launched in the coming weeks with a focus on top 5-7 markets, said the Ola executive
Ola will deploy the cars for Self-drive rental category in major cities in coming months. The investment for same will come from a mix of debt and equity over the next couple of years
Ola was likely to raise debt via Ola Fleet Technologies to seed the new business. So far, the multi-modal transport company has relied on equity capital from some of the world’s largest investors, including Japan’s SoftBank and US investment firm Tiger Global, to fund its rapid growth in the country.
Earlier this month, Ola had raised $300 million from Hyundai Motor and Kia Motors, as it looks to collaborate with the South Korean auto majors to build India-specific mobility solutions. Notably, Hyundai is also an investor in Revv, an another Self-Drive Car Rental company based out of Gurgaon.
The scale of the proposed service will make Ola the largest self-drive car rental company in India. At present, the sector is highly fragmented with small regional players and some larger players including Myles, Zoomcar, and Drivezy.
Ola’s move to enter the self-drive rental category is in line with its broader strategy of expanding its bouquet of transport solutions beyond just cabs to include scooters and electric vehicles with a view towards ensuring sustainability and positive unit economics. In the last few years, the company has launched a slew of businesses that generate higher margins such as outstation rentals.
To recall, in February last year Mahindra picked up a 16% stake in Bengaluru-based self-drive car rental startup Zoomcar for $27.6 million as part of a Series C round of funding worth $40 million (Rs 256 crore).
In September last year, Honda Motorcycle and Scooter India Pvt. Ltd. has joined hands with Drivezy to offer 3,000 scooters on the latter’s platform in Bengaluru and Hyderabad. The strategic partnership sees the company gain momentum in the innovative future of shared mobility services.