Ola, the SoftBank-backed competitor to Uber, has dished out $200 million to buy smaller rival TaxiForSure in what looks like being the first of a number of consolidation moves in India’s taxi-hailing space.
The deal — which has been speculated for months, and is based on cash and equity — should significantly increase Ola’s position as the widest-reaching taxi app service in India, although both services will operate under their own brands.
Ola currently claims to offer 100,000 vehicles across 67 cities in the country, and to that number it will add TaxiForSure’s 15,000 vehicles across 47 cities. In contrast, Uber serves 11 cities in India, offering mainly higher-priced, premium-marketed rides — although it does have a budget ‘Go’ service.
There had been rumors about the future of TaxiForSure’s founders, and the companies confirmed today that co-founders Aprameya Radhakrishna and Raghunandan G “will contribute in an advisory role for a certain period”. Their tenure may well be brief, but TaxiForSure’s 1,700 staff will stay with the company, which will be helmed by Arvind Singh who is stepping up from COO to CEO.
“There’s a lot of complementary value in the strategy TaxiForSure has followed. I’m very excited to welcome the TaxiForSure team onboard and look forward to working with them towards realising our common vision,” said Ola CEO Bhavish Aggarwal in a statement.
This isn’t the first deal of this kind in India. Last month, China’s top two taxi-hailing companies — Didi Dache and Kuaidi Dache — announced a merger. They too will operate as separate entities.
Interestingly, these two deals have an investor in common: SoftBank. We noted earlier this year that the Japanese telecom giant has fast become Uber’s chief competitor across Asia with a series of investment deals. Beyond Ola, and Kuaidi Dache, SoftBank is also a major stakeholder in GrabTaxi, which rivals Uber in Southeast Asia, via a $250 million funding deal.