Ola has launched a new low cost service dubbed as Ola Micro which is the company’s answer to Uber’s UberGo service. The service is being launched in seven cities in India at Rs 6 per kilometer.
Ola Micro will be available in Delhi, Mumbai, Kolkata, Bengaluru, Chennai, Pune and Hyderabad. The per kilometer charges for Ola Micro will be less by Rs. 1 compared to UberGo which is priced at Rs 7 per km. The base price, however, is lower in UberGo compared to Ola Micro. For a usual two to four kilometer drive, UberGo would be slightly less expensive than Ola Micro, while for more than four kilometers, Ola would be cheaper. Ola Micro will include car models like Hyundai Eon, Wagon R and Datsun Go. Ola claims it has over 70% market share in India with presence in over 100 Indian cities while Uber is currently operating in 26 cities in the country.
Ola’s chief financial officer Rajiv Bansal told TOI
The focus of the company is on growth rather than profits at the moment. The price war will go on for as long as it takes. That is not an issue for us. We are solving a real problem here and there are only two key players in such a huge market.