India’s largest cab aggregator Ola on Wednesday said it was shutting down operations at TaxiForSure (TFS), a move seen as a bid to integrate its operation and cut costs. The decision comes 17 months after Ola acquired its cross-town rival for $200 million (Rs.1,200 crore) in a cash and equity deal.
Post the acquisition, Ola was operating TFS as a separate entity. However, in August last, Ola had closed TaxiForSure (TFS) service in about 22 smaller cities. The company also saw many senior-level exits including that of its CEO Arvind Singhal.
TaxiForSure was founded in 2011 by two Indian Institute of Management-Ahmedabad alumni Raghunandan G and Aprameya Radhakrishna.
According to media reports, Ola’s decision will result in about 1,000 people losing jobs at TaxiForSure. However, some insiders in the cab aggregator said the job losses would be in the range of about 400-500.
The company official also said the operator was paying severance benefits and outplacement services to help the affected employees pursue new career opportunities.
Ola has completed the integration of TFS to its Ola app, the company said in a statement. “The TaxiForSure (TFS) value proposition as an economy brand for customers has been seamlessly integrated onto the Ola platform with the launch and rapid adoption of Ola Micro. With all TFS driver-partners and customers coming on board the Ola app, the integration is now complete,” according to the statement from the company.
The Softbank-backed company had introduced the ‘Micro’ service in March this year to compete with UberGo. Ola Micro has expanded to more than 90 cities across India, according to the company.
“We have absorbed as many TFS employees for open roles in Ola as needed to support our growth. For positions that cease to exist as a result of this transition, we are offering enhanced severance benefits and outplacement services to help affected employees pursue new career opportunities,” the statement added.
Analysts said the move by Ola to shut down TFS was to consolidate its presence, reduce cash burn and rationalise costs.
“The move to shut TFS can be seen as a move by Ola to rationalise the cost,” said Arvind K. Singhal, Chairman and Managing Director, Technopak. “It is trying to retain one powerful brand than maintaining two brands,”
[Source: The Hindu]
