Ride-hailing major Ola has relaunched its bike taxi services in Bengaluru after months of absence in the city, its cofounder and CEO Bhavish Aggarwal said in a social media post.
Ola will only operate its S1 range of scooters for the service, Aggarwal said in an X post, adding that the unicorn plans to expand the service to the rest of the country over the next few months.
The ride-hailing major will charge aggressive flat rates of INR 25 for 5 kilometres and INR 50 for 10 kilometres. The pricing can be interpreted as a bid to outprice competition in Uber and Rapido.
The reentry of Ola in Bengaluru’s bike taxi market comes when bike taxis have come on the government’s radar. Several state governments, including Karnataka, are looking into banning bike taxis. Earlier this week, Karnataka State Minister Ramalinga Reddy said the state is working towards permanently banning Rapido bike taxis.
The primary cause for banning bike taxis has been the electrification norms set down by the Centre and states’ aggregator laws, which set steep timelines for two-wheeler aggregators to go all-electric. Karnataka was the first state in the country to roll out an electric bike taxi policy in July 2021. However, no operator has begun offering electric bike taxi services in Bengaluru, two years after the policy was signed into law.
However, with this move, Ola becomes compliant with the electrification norms, though it might not be the end of its worries just yet. Multiple transport trade bodies in Karnataka have been demanding to either regulate bike taxis or outright ban them.
In March, nearly 2 Lakh auto drivers in Bengaluru took to the streets to demand a ban on bike taxis in one of the biggest protests against the business model. Auto drivers argue that bike taxis cut into their business since bike taxis can offer cheaper fares.
This is also the second product launch by Ola in as many months, as the company recently launched its Prime Plus service, with no cancellations.
The company continues to make losses, however. ANI Technologies, which operates Ola Cabs, has reported a 1.3X rise in its net loss for the financial year 2021-22 (FY22). The Bengaluru-based unicorn’s loss stood at INR 1,522.3 Cr during the year, up 36.3% from INR 1,116.1 Cr incurred in the year-ago fiscal.
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