SoftBank-backed ride hailing giant Ola announced Thursday it is tripling its bike-taxi service—a bone of contention for local authorities in its hometown Bengaluru—from the current 150 Indian cities in a year with a focus to serve commuters in smaller cities.
Branded as OlaBike, the company launched its bike-taxi service in 2016 and claims to have a network of over 300,000 bike-partners, “ensuring a regular source of income for them.”
Being ubiquitous across India, two-wheelers are popular for being a more economical alternative to cars and buses. In a press statement, Ola said bike-taxi is one of its fastest-growing categories which is enabling first and last-mile connectivity in large cities to help maneuver commuters through congested roads and a primary mobility solution in small towns.
“Ola Bike has enabled citizens from the smallest of towns such as Chapra in Bihar to large metropolitan areas such as Gurgaon with access to quick, reliable and affordable mobility,” said Arun Srinivas, chief sales and marketing officer at Ola.
Ola has locked horns with local authorities on multiple occasions in its biggest market Bengaluru, capital of the southern Indian state Karnataka. Earlier this year, Ola’s bike-taxi was deemed illegal by local transport authority which seized its 250 two-wheelers and canceled its license for six months. However, within three days of its suspension, Ola valued at USD 6.2 billion paid a fine of USD 21,000 to the authorities and got its license as well as bikes back on its platform.
Bike-taxi startups in India have not been able to scale as it always gets embroiled with local authorities for not complying with the law. In April this year, transport department in Bengaluru seized 170 bikes of another such startup Rapido for allegedly running an illegal service in the city. Rapido recently raised USD 54 million in Series B round led by WestBridge Capital and Nexus Venture Partners, with participation from other investors including Shunwei Capital, Alipay-backed BAce Capital, among others.
While bike-taxi services flourish and expand to new services in Southeast Asian countries, regulatory hurdles have forced many similar Indian startups such as Dot, TuWheelz, Rideji, Headlyt, Heybob, and Zingo to shut shop within a year of their operation.