Uber rival Ola cuts operations fanning fears it may leave Australia

Uber rival Ola says it still has a future in Australia despite the ride sharing company closing most of its local operations and making most of its local staff redundant.

The company’s Australian managing director Simon Smith, who joined the company in 2018, has left the business. Meanwhile, Ola has also closed its local driver offices and cancelled its personal accident insurance program for drivers.

In a message sent to drivers Ola said the local driver offices would be closed “until further notice”.

Ride share business Ola has made the majority of its staff in Australia redundant.
Ride share business Ola has made the majority of its staff in Australia redundant. Credit:Ryan Stuart

One former Ola employee, who wished to remain anonymous, said it had been hard for the business to compete with market incumbent Uber and Chinese startup Didi, which made a strong entry into the Australian market with heavy discounting.


“I can’t see how it is feasible for Ola to last even a few more weeks in Australia,” he said.

The Indian ride sharing company launched in Australia in 2018 and employed up to 50 people locally. About 11 staff remain after the recent redundancies.

However, an Ola spokesperson said Australia remained a key market.

“Australia, and in no uncertain terms, is a key market for Ola and we are focused on growing our business in the region.”

“As part of our efforts to drive greater synergies and efficiencies in the business we have made some changes in our organisational structure,” the spokesperson said.

The company added it had been reviewing its requirements over recent months and had updated its driver insurance arrangements.

Ola's former managing director in Australia, Simon Smith.
Ola’s former managing director in Australia, Simon Smith. Credit:Dominic Lorrimer

“This means that our previous personal accident insurance program for drivers is no longer in effect,” the message said.

“Drivers may choose to obtain their own insurance according to what works best for them and their circumstances.”

Ola was valued at over $US6 billion ($8.1 billion) before the coronavirus pandemic hit with plans to work towards an initial public offering and investors, including SoftBank, Tiger Global Management and Matrix Partners.

Ride sharing companies have struggled during the pandemic with Uber last month reporting net revenues of its global ride sharing business fell to $US1.4 billion for the third quarter of 2020, down from $US2.9 billion for the same period last year.

Technology Newsletter

The top technology stories and reviews delivered weekly. Sign up to The Age‘s newsletter here and The Sydney Morning Herald‘s here.

Most Viewed in Business

Source: Thanks smh.com