Indian cab aggregator Ola Cabs witnessed a seven-fold climb in its revenues for FY16. However, the firm losses nearly tripled amid massive discounts to lure customers and high incentives doled out to drivers, according to report by a leading economic journal.
Ola posted revenue of Rs 758.23 crore in FY16 as compared to a revenue of Rs 103.8 crore in the year before that, according to regulatory documents sourced by Mint from data platform Tofler. Losses tripled to Rs 2, 313.7 crore from Rs 796 crore in that same period.
Employee costs increased over five times to Rs 379 crore in FY16. As Ola went all out in the battle against rival Uber, advertising and sales promotion costs rose four times to Rs 385.5 crore.
According to an Economic Times report, analysts and employees at Ola say that the company clocked about six million weekly rides on an average between September and December 2016 across Ola cabs, autos and shuttle buses. And around 70-75% of revenues for Ola and Uber came from their low-cost offerings Ola Micro, Mini and UberGo.
The competition is quite tough for Ola with Uber inching closer to it. As against Ola’s operating revenues of Rs 383.44 crore, Uber India clocked Rs 374.79 crore, but with a profit of Rs 28.84 crore, as per the ET report.
Both Ola and Uber earn revenues out of the commission charged to drivers. Both cab operators charge 15-20% commission from drivers.
However, as per the Mint report, the revenue figure Ola reported for FY15 in the latest regulatory filings appears to be different from the number is reported last year.
The report says that last year itreported that Ola registered an eight-fold jump in revenue. Ola had reported full-year revenue of about Rs 418 crore in FY15 according to filings that the company posted in June last year. However, in the latest filings, Ola has said it posted revenue that was nearly a quarter of that figure at Rs 103.8 crore.