India’s largest taxi aggregator, Ola, has shut down its TaxiForSure (TFS) business and has laid off 700 employees in the process, as it looks to consolidate its presence and reduce cash burn to fend off an attack from Uber.
Ola had acquired smaller rival TFS in March 2015 for $200 million to help it maintain market leadership against Uber. While Ola had said it would maintain TaxiForSure as an independent entity, the company soon began moving drivers from TFS to its own platform.
The Economic Times newspaper first reported this story on Wednesday. Ola declined to comment on the story.
While the TFS Android app was still functional, apart from the Ola Micro category, which the company cross-sells, no cabs were available in the Nano, Hatchback and Sedan categories. Since the acquisition, Ola has been pursuing drivers on TFS to join its own platform.
Apart from cross-selling cabs on both platforms, Ola did not go in for larger integration of the two services, picking its own technology as the successor. With the lack of any sort of autonomy, TFS saw a slew of senior level exits, including that of CEO Arvind Singhal.
Moreover, disconnect between the two companies was evident, with Ola failing to report driver and cab numbers from TaxiForSure, and shutting off the company from interactions with the press a little while after the merger, despite claiming that TFS was being marketed as a more affordable cab solution.
According to the newspaper’s report, the layoffs alone will help Ola save on Rs 30 crore in salaries every month.
While Ola has done away with TFS, the company did adopt the idea of having multiple categories at different price points from the latter. Today, Ola has Micro, Mini, Prime and Lux, apart from aggregating auto rickshaws on its platform.
The company is also experimenting with outstation cabs and renting cabs by the hour, a business it once killed by allowing customers to book cabs instantly and avoid paying for idle time a cab spends.
As Uber plays catch up, Ola is desperate to find another winning formula that could help it stay in the lead, especially after Uber gave up the fight in China.