Several drivers reported earnings as high as Rs 1 lakh per month when the battle between the two companies
was at its peak, somewhere around mid-2016.
Since then, however, both Ola and Uber have cut incentives being paid to drivers, in many cases forcing them to go on strike demanding better pay. The impact of this is a reduction in the number of cabs available on both platforms, which saw the industry post its first-ever negative growth in the first quarter of 2017.
One of the complaints drivers had been most vocal about is that Ola was diverting business to cars leased through it, creating a shortage of supply for drivers who had signed up independently. Ola at the time had denied those claims, saying its platform was unbiased when it came to providing supply of passengers to cabs.
However, studying the terms of a Rs 1,000 crore loan deal between Ola Fleet Technologies and YES Bank that was closed on December 30, it is clear that the onus of non-repayment by drivers is on the ride-hailing company.
“Borrower to ensure the repayment is not affected due to change in government regulation/local laws or any other such incidence which hampers the plying of vehicles,” a document filed with the registrar of companies
(RoC) reads. The filings showed that loans have been facilitated by private banks — Axis Bank, HDFC Bank, ICICI Bank and Yes Bank.
Uber, too, has set up a subsidiary, Xchange Leasing, in India to facilitate leasing of cars to drivers who want to work on its platform. Since last year, the US-based company has invested
Rs 250 crore in the arm in two tranches. The investments are seen as part of the $1 billion Uber has committed to India and the portion of the $3.5 billion it raised from the Saudi Public Investment Fund that it said it would also deploy to take on Ola.
The $1.4 billion in loans that Ola has in guarantee from banks is a little over 80 per cent of the amount company has raised from investors, of which SoftBank is the largest. The Indian ride-hailing firm has raised nearly
$1.7 billion in equity so far and currently enjoys a valuation of $3 billion.
In June, parent company ANI Technologies invested a further Rs 100 crore in Ola Fleet Technologies, according to documents filed with the RoC. In September 2015, when Ola began leasing cars on its platform, it had said it would invest Rs 5,000 crore in its leasing arm over the next few years to build a large base of cabs on its platform.