Indian cab aggregator Ola has announced that it is shutting down its bus unit Ola Shuttle, as a part of a “re-balancing” of its mobility portfolio, reported Economic Times.
Ola’s Shuttle bus service will now be terminated in cities of Delhi-NCR, Mumbai, Kolkata,Hyderabad and Chennai.
The news is surprising as the SoftBank backed Ola on the other hand has raised massive amount of funding which could have sufficed if it wanted to keep the engine running. Ola is also focusing on global expansion, starting from Australia.
Ola had sent notifications to their customers in the above stated cities, informing them that the Ola Shuttle services will no longer be available starting February 3. The drivers were instructed to return their smartphones, GPS Devices and cameras later by the week end. In a letter to the operators, the company said it would compete full and final settlement with operators by 17 February, as per the source VCCircle.
“Our plan is to further strengthen a range of other in-city commuting alternatives for added customer convenience. The plan includes expansion and focus on new and emerging categories like Autos, Share, and opportunities such as electric vehicles and advanced in-vehicle technologies,” an Ola spokesperson said in an email response.
“The plan includes expansion and focus on new and emerging categories like Autos, Share, and opportunities such as electric vehicles and advanced in-vehicle technologies,” it added.
Ola forayed into the bus service space in 2015, and soon expanded across the 10 cities. Operated by ANI Technologies Pvt Ltd, the company offered huge discounts and rates to bus operators in comparison to the other players in the segment.
The app based bus service is not so organized when compared to cab services. The companies often run into troubles with regulation authorities and public transport services.
In this space, Shuttl is one of the key competitor of the cab hailing giant. It raised a funding of $20 million from Lightspeed Ventures, Sequoia and Times Internet in December 2015, while ZipGO, another startup is bus service had raised $5 million to scale their businesses.
There may be a possibility, after shutting it down, it will acquire some other company in this space after the sector is more organized.