Following the launch of Taxify in December last year, Australians will soon have another option when it comes to ride-sharing companies with Indian startup Ola announcing its local expansion on Tuesday.
Founded in 2011, Ola has been based out of India since launch, with operations in more than 110 cities and over 125 million users. This is the company’s first international expansion, and it claims to facilitate more than 1 billion rides annually through the platform.
According to Crunchbase, Ola’s parent company ANI Technologies has raised a whopping $US3 billion ($3.7 billion) in funding since launch, receiving significant capital from big-name investors such as Softbank, Sequoia, and Vanguard.
Its latest raise was $US1.1 billion ($1.3 billion) in October from Softbank and Tencent, valuing the company at a cool $US7 billion ($8.6 billion).
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“We are very excited about launching Ola in Australia and see immense potential for the ride-sharing ecosystem which embraces new technology and innovation,” Bhavish Aggarwal, co-founder and chief executive of Ola said in a statement.
“With a strong focus on driver-partners and the community at large, we aim to create a high-quality and affordable travel experience for citizens and look forward to contributing to a healthy mobility ecosystem in Australia.”
The company is currently inviting drivers to sign up for launch in Melbourne, Sydney, and Perth, but is still waiting for regulatory approval before launching services for consumers.
Reports from early last year suggest Ola takes a commission of 25% in the Indian market, but it’s offering launch driver-partners in Australia a 7.5% commission as an introductory offer.
It’s unclear if Ola will consider its drivers employees or contractors in Australia, and the company has been the subject of protests from drivers who have demanded better pay and working conditions in its home country. While Australia has not seen protests from ride-sharing drivers on the same scale as other countries, the Fair Work Ombudsman previously launched an investigation into whether Uber’s local hiring practices comply with Australian workplace law.
Australia’s ride-sharing options
The arrival of Ola signals a heating-up of the Australian ride-sharing market, with incumbent Uber increasingly seeing challenges from smaller international players who are expanding rapidly locally. Taxify announced its launch into Melbourne this month, just after its Sydney launch in December.
But although Ola and Taxify are some of the largest ride-sharing operators to venture Down Under, a number of local startups have also had a crack at disrupting the market. Here’s a quick rundown of all of the options available — or soon to be available — in Australia, and the niche they fill.
Founded: 2009, launched in Australia in 2012.
Needing no introduction, Uber quickly took off around the world as the first real disruptor of the taxi and ride-hailing industry and has enjoyed its spot at the top of the pecking order. However, the company’s journey hasn’t been without issues, with former chief executive Travis Kalanick struggling against numerous controversies during his time at the top.
The company has also been legislated against in numerous jurisdictions, varying from outright bans to significant government-imposed levies. New South Wales has today announced a $1 levy for all taxi, hire car and ride-share passengers in the state.
Commission: 15% (1% also goes to charities)
A fresh competitor to the market, Shebah carves its niche by only offering ride-share services to female passengers and drivers, and children. Shebah founder Georgina McEnroe told Fairfax she launched the app to make women feel safer in the typically male-dominated ride-sharing space, saying her and her friends’ experiences with other services left her feeling that “getting in a small space with a guy seemed inherently unsafe”.
Shebah is available in Melbourne, Geelong, Sydney, Brisbane, Gold Coast, Sunshine Coast and Perth, with Darwin, Hobart and Adelaide services to launch soon.
Launched in 2011 by Ned Moorfield and Andrew Campbell, GoCatch originated as a taxi-booking application, but expanded its offerings in 2016 to serve the ride-sharing market through its GoCar offerings. Since then, the company — now headed up by former CarAdvice chief David Holmes — says its seen a “pretty brutal” fight against Uber in Sydney and Queensland.
“They’re pretty brutal, they play dirty but we’re not going to come down to their level,” Holmes said in 2016.
While not strictly a ride-sharing startup, Oiii is looking to offer a hybrid alternative to both ride-sharing networks like Uber and traditional taxi services.
Oiii offers two models for drivers. “Primary” operators pay a fee of $800 for their cars to be transformed into Oiii taxis, complete with safety features, signage and taxi facilities, plus a monthly fee of $260, according to Fairfax. There is also a 10% commission taken on rides booked through the company’s app. “Secondary” drivers are existing taxi drivers who can opt to use the Oiii app.
The company is hoping to get 1000 of its Oiii branded cars on the road by June.
“There is a bit of a glorified hitch-hiking to the ride-sharing service that has come in and is very appealing to consumers,” Roland Grelewicz, chief executive of Oiii told Fairfax.
“On the other side there is a lot of concerns about it. What we have seen is therefore our own opportunity to disrupt the multimillion-dollar ride-sharing industry and to create a new transport and taxi type.”
Founded: 2013, launched in Australia in 2017.
Launching locally only in the past two months, Taxify’s origins are rooted in Ukraine, with founder Markus Villig motivated by a desire to solve issues around taxi availability in the country. Since then, the ride-sharing operator has expanded significantly throughout Europe raised over $2.7 million in capital.
“We launched in Paris six weeks ago and we’re already starting to bite at Uber’s heels,” country manager Sam Raciti told StartupSmart at the end of last year.
“I’m not just the country manager, I’m also an Aussie, and I know everyone wants a company to come in and give us an alternative choice. We’re ready for it.”
Commission: 0% (drivers pay to rent a car from Hertz)
Having operated mostly in Sydney since launch, The Australian reported in 2017 that ride-sharing company Hop was looking to go national off the back of a capital raise. The startup provides ride-sharing options via drivers who rent the cars through rental operator Hertz, with these drivers paying rental fees but keeping all of the fares made through the service.
“We are not going to crush Uber but we will make them start seriously thinking about how they run their operations in Australia,” co-founder Andrew Morello told The Australian.