Ola has suspended food delivery business of Foodpanda, which the cab aggregator acquired in 2017, reported LiveMint. Ola has even laid off about 40 mid- to entry-level employees and terminated the contracts of most of its 1,500 food delivery executives, said the report citing four people aware of the development and confirming the report.
For last couple of months, Ola is reportedly struggling to keep the Foodpanda business afloat as the established specialty players such as Swiggy, Zomato and Ubereats have already acquired a major portion of the market.
According to the report, Ola wants to shift its focus from food delivery from restaurants to its own brands and in-house cloud kitchen business, which it launched after Foodpanda acquired Holachef, a Mumbai-based food-tech startup, in October last year.
Ola has launched a few brands and is considering the launch of a few more. Under its cloud kitchen business, Foodpanda currently owns three private label brands – The Great Khichdi Experiment, Lovemade and FLRT.
The report quoted one of its sources, “They (Ola) have realized they can’t burn money like Swiggy and Zomato, which is why they only want to do in-house brands. Over the last few months, Foodpanda has been scaling down its marketplace.”
Following the suspension of Foodpanda, Ola is now in talks with delivery firms such as Dunzo and Zomato to re-list its cloud kitchen brands. It wants to focus only on running the cloud kitchen brands instead of a food delivery business, the report said.
In the last two weeks alone, Ola has dissolved the ground team of Foodpanda completely. While Ola has retained its core operations team having senior employees, the entry-level employees were given pink-slips which then was followed by lay-off of on-ground operations team. Notably, it was Ola founder and CEO Bhavish Aggarwal who supervised the staffing of executives at Foodpanda post its acquisition.
In 2015, Ola had tried its hands on food delivery business with Ola Cafe, where customers could order through the app and Ola cabs would deliver the order in quick time. However, within a year later the company had to shut down the service on account of stiff competition from Swiggy and Zomato.
In the same year, Ola also tried to diversify its business by adding online grocery delivery service to its offerings by launching ‘Ola Store’ in July 2015
Last year in May, it was reported that Ola’s parent ANI Technologies Pvt. Ltd was setting up a holding company that will own different business units, including its core cab business, food delivery app Foodpanda and the nascent businesses of electric vehicles (EV) and the international unit.