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Ola Cabs: Save million dollars per year now!

Ankit - April 7, 2016 - 2 comments

I have been traveling a lot via Uber and Ola lately. Since I mostly travel alone, I open conversations with cab drivers about their experience with companies. While most of drivers have good experience with riders and company. There are some common problems which they constantly face, i.e., They want to go home and look for a ride that is closer to their home location. Now, this particular problem generates other types of problems.

Here’s a scenario: After finishing your work, You book a cab. The driver calls and asks where you want to go. After listening to your destination, Driver starts making excuses, like he is on another side of the road or car’s tyre, has been punctured. From some of them, You hear another call in 5 minutes, that he is stuck in a jam. Some are honest, and they request you to cancel as they are looking for a ride that is closer to their home. Of course, there is a rating system but drivers know how they maintain their ratings while refusing the rides.

Ola on the other hand, Ola loses it’s credibility. The whole purpose of streamlining the cab booking gets defeated. This is similar to Auto Problem. In Auto Problem, Driver asks you for destination and refuse to ride if he is unwilling to go there.

Ola, However, can solve this issue by adding a single feature to their app. Not only this feature will save Ola some money but it would also help in reducing the cancellation rate.

The OLA! Model
For every ride a driver makes, Ola pays an incentive of Rs. 150-200 per ride on top of actual fare. Ola claims to have 450,000 drivers and currently they are doing 1 million rides each day. With this model, Ola is spending a lot of amount in Incentivizing the drivers which go up to 10 million dollars a month.

What’s about that new feature?
Drivers when signing off their duty, Want to get a ride that is closer to home. Rider wants a low cost fast journey to home and Ola wants happy customers.

I propose a button in Ola’s driver application named “Going Home”. When turned off, This specific feature will match riders that are looking to travel in same direction as driver’s home. Ola already has “Ola Share” feature which is similar to this. It’s just about matching the driver’s location instead of other rider’s location. Drop location should be within 5-8kms radius of driver’s home. Ola then can deduct the per ride incentive by 50%. This 50% can be even given to riders or can be used by Ola to cut down losses.

Let’s talk numbers:
I have spoken to several drivers about this concept, I found 100% of them to be excited about it. The following stats are predicted based on my research:

  • Ride cancellations reduced by 60%
  • 20% decrease in cost borne by Ola per ride.
  • Customer engagement and loyalty up by 50%
  • Growth rate up by 20%.
Author avatar


Delhi based CSM with a strong belief in Open-Source technologies.

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  1. praddy

    UBER actually took your suggestion into account. I remember sometime in May when I heard about this feature for signing off drivers in UBER.

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