Ola Fleet Technologies Pvt. Ltd, the cab-leasing arm of taxi aggregator Ola, has received fresh infusion of Rs 50 crore ($7.7 million) from ANI Technologies Pvt. Ltd, the parent company.
According to the filings with the Ministry of Corporate Affairs, Ola Fleet received the fresh capital on 12 October and, in return, allocated 50 million equity shares at a subscription price of Rs 10 apiece.
In February, Ola had pumped in Rs 50 crore and another Rs 100 crore in July into the cab-leasing arm, previous filings show.
In September, VCCircle had reported that Ola Fleet had availed a term loan of Rs 1,000 crore ($156.3 million) from Yes Bank to finance the purchase of commercial vehicles.
E-mail queries to Ola seeking more information on the transaction did not elicit an immediate response.
The development comes at a time when the cab leasing business of both Ola and Uber are facing a series of setbacks, including driver exits and defaults on car loan EMIs following dwindling driver incomes.
In May, The Economic Times had reported that the State Bank of India had suspended car loans for Uber and Ola taxis, following loan defaults of about Rs 120 crore due to non-payment of dues by drivers. The bank had also seized 300 cars owned by both companies.
Out of the Rs 120 crore, the exposure to drivers affiliated with Ola, alone, amounted to Rs 60 crore, with defaults of Rs 16 crore. The report had said that Axis Bank had also stopped lending to Uber.
Earlier this month, a Wall Street Journal report had said that Uber was shutting down Xchange Leasing LLC, its auto-leasing business in the US. The report added that the cab hailer had sustained 18 times more expense money per vehicle-unit.
In March, Reuters had reported that Uber’s Indian subsidiary was also reviewing its cab-leasing programme, following large-scale returns of leased cars by drivers, who quit over falling incomes and incentives. Uber operates its Indian cab leasing business under Xchange Leasing India Pvt. Ltd.
Both Ola and Uber had started off with an asset-light model, but had subsequently launched their respective cab-leasing programmes to gain more control over their driver partners and restrain them from migrating to rival companies. However, it appears that the companies did not anticipate the impact of reduced incentives and earnings. Large-scale driver exits have now put the leasing businesses in a limbo.