Ola set for recast on road to profit; may announce Vijay Ghadge as new COO

Bengaluru-based ride-hailing unicorn Ola is set to name Vijay Ghadge chief operating officer (COO), two people familiar with the development said. The position has been vacant ever since Vishal Kaul left the company in May. Ola Co-Founder and Chief Technology Officer Ankit Bhati is currently filling in as COO. 

Ghadge, a vice-president at Ola, is among the key members in Founder and Chief Executive Officer Bhavish Aggarwal’s team, along with Bhati and Pallav Singh. He initially reported to Kaul. But after Kaul’s departure, the stature of the former Vulcan executive has been growing in the firm. 

Ghadge’s appointment is likely to be central to a major restructuring at Ola. Sources suggest there could be a churn in staff, affecting around 40 per cent in the organisation. There are talks of shifting some of the employees to Foodpanda, which was acquired by Ola in December 2017 in an all-stock deal. Many others are likely to be moved to different roles cutting across departments, according to one of the persons quoted above. 

Hiring, however, will continue in the foreign markets. Ola’s current operational structure, based on a city-level hierarchy, will also be done away with, it is learnt. At present, the Ola universe divides the country into six major cities, while the rest of the market is called emerging India. In a shift, Ola is trying to create a central leadership, similar to the Uber model. The company is now split into four regions — North, South, East, and West. Hyderabad is attached to the East and not the South because Ola needs a high-earning city in the East to explain its presence in that zone.

Moving forward, each zone will have clusters, which will report to a central figure - Ghadge. It also means that all the senior leadership Ola had hired will be given roles within the headquarters. Some will possibly become redundant, according to sources. This has caused trepidation among Ola employees.

An Ola spokesperson, however, denied any of this was on the cards. 

The changes in Ola have been in the pipeline since Uber resisted attempts to merge its India operations with the Bengaluru-based company. It is learnt that after Ola’s investors asked the company to turn profitable by the end of 2020, the cab aggregator has dropped services which were bleeding money in the short term: bus service and cycle sharing. It is also winding down Ola Corporate and Ola Bike; the latter operates primarily in Gurugram. This is how the Ola universe works, splitting its operations into four — Foodpanda, share, cabs, and auto. Share and cabs together form the cars vertical.

The car business is where Ola operates at a 5-7 per cent loss per ride, estimates suggest. Its growth year-on-year has been flat at 1.4-1.5 million rides a day. And its average ticket size, estimated at Rs 88, could see a further drop if internal modelling prediction is to be believed. Business Standard could not independently verify this. In fact, sources pointed out that Ola started international operations to push up its ticket price. There have been other steps like increasing passenger fare and slashing drivers’ incentives, too, for an improved ticket price.

In the meantime, Ola’s auto business brings in high volumes, but it also bleeds the most. It bleeds because currently Ola takes almost no commission from auto drivers while giving them incentive. 

FULL THROTTLE

• New structure of Ola will be centralised, just like Uber
• The markets were originally split into top five cities and emerging India
• Now it will be split into North, South, East, and West
• Hyderabad is part of the East zone
• Some city heads will become region heads
• Some will be hived off to Foodpanda
• Some will be moved sideways into roles, most probably, at Ola HQs in Bengaluru