India-based ridesharing company Ola has shut down its operations in Australia with just two days’ notice, leaving Uber with few local competitors.
Ola sent an email to its Australian users and drivers earlier this week informing them that it will be “discontinuing operations” on 12 April.
The company later confirmed that it will also be shutting down in the United Kingdom and New Zealand to focus entirely on the Indian market.
“This means that you will no longer be able to book any rides through your Ola app from that date,” the email to Ola users said.
“You must not take any rides with any vehicle purporting to be an Ola vehicle or Ola driver from 12 April 2024. Ola has not authorised any driver or any other party to use the Ola brand or provide rides on Ola’s behalf.”
Old told drivers to get rid of all its branded materials.
“You must destroy any and all Ola materials, stickers and labels, and copies of Ola permits you may have in your possession or control and remove all Ola stickers or labels from your vehicle,” the email said.
The company has not revealed why it is shutting down in Australia, and emails to its media contact were bouncing back as of Wednesday.
In a statement provided to the Indian Express, an Ola spokesperson said the company was shuttering operations everywhere except for India.
“Our ride hailing business is growing rapidly, and we remain profitable and segment leaders in India,” the spokesperson said.
“The future of mobility is electric – not just in personal mobility but also for the ride-hailing business and there is immense opportunity for expansion in India. With this clear focus, we’ve reassessed our priorities and have decided to shut down our overseas ride-hailing business in its current form in the UK, Australia and New Zealand.”
The Transport Workers’ Union is now seeking an urgent meeting with Ola to ensure its drivers are adequately compensated.
“Workers in the gig transport economy have for too long been ripped off minimum wage and other rights, and put under deadly pressure to prioritise speed over safety when delivering food,” Transport Workers’ Union national secretary Michael Kaine said.
“This industry is cannibalising itself. Companies operating sustainable models that support workers are being forced out through unchecked supply chain pressure and exploitative competition from the likes of Amazon.
“Ola’s exit shows how critical it is to get standards in place to lift pay and make transport gig jobs safe, secure and sustainable.”
Uber competition
Ola is one of the major ridesharing competitors to Uber in Australia, and its exit from the market leaves few other significant players.
Ola was founded by Bhavish Aggarwal and Ankit Bhati in India in 2011 and launched in Australia in 2018. According to its website, Ola has been operating in Sydney, Melbourne, Brisbane, the Gold Coast, Adelaide, Canberra and Perth.
The company had aimed to differentiate itself from Uber by marketing itself as safer for riders and providing better pay for drivers by taking a 15 per cent commission rate.
It comes after gig economy food delivery company Deliveroo placed its Australian subsidiary into voluntary administration in late 2022.
Uber itself has faced a number of challenges in Australia this year.
Earlier this year Uber agreed to a $272 million class action lawsuit settlement with Australian taxi drivers, centred on its launch in Australia before ridesharing was legalised.
It is also currently embroiled in a legal fight with Australian competitor GoCatch, which has accused Uber of engaging in corporate espionage to “destroy” its rival.
GoCatch is suing Uber in the Supreme Court of Victoria, accusing the ridesharing giant of infiltrating its server and obtaining the contact details of its drivers in an effort to poach them, among other tactics aimed at stifling the competition.
