Cab service operator Ola on Thursday (Sept 8) partnered with the Mahindra group that will help foster entrepreneurship among drivers as well as boost the latter’s earnings by around Rs 26 billion over the next two years.
While Mahindra follows its rival Tata Motors which has joined hands with Uber, for Ola this is the second such alliance having been tied up with Nissan India to buy and lend cars to its drivers.
These alliances come on the heels of a string of tie-ups between online taxi services and automakers both globally as well as here, to cash in on the rising demand and popularity of these services
The domestic taxi market is worth nearly around Rs 800 bn or around $12 bn.
Under the alliance, M&M and its group companies in the financial insurance and its used car/bike arm Mahindra First Choice, will sell products (its sole car brand Verito to begin with) and services to Ola.
With this, it will earn an additional Rs 26 bn over the next two years when it hopes to sell around 40,000 units, Mahindra Group chairman Anand Mahindra told reporters here announcing the tie-up.
If the alliance works out as planned, it will give be a big boost to Mahindra, as it has been struggling with its only car model Verito, managing to sell around 200 units a month.
The Verito has originally come from its erstwhile French partner Renault.
Asked whether the tie-up is only for Verito, the company officials did not offer a clear answer.
Mahindra said the company has set a target of selling 20,000 units this year through this alliance and double it over the next two years.
Ola, on the other hand will get access to a one-stop-shop for vehicles and services for its drivers under which the company hopes to foster entrepreneurship.
The alliance will provide 100 per cent financing to buy Mahindra cars or used card through its platform Mahindra First Choice, apart from providing parts and after sales at discounts.
Earlier this year, Mahindra had expressed concern over the growth of ride-sharing and cab aggregators, terming them as disruptors detrimental to automakers as this will lead to lower car/vehicle ownerships.
