Ola Fleet Technologies Pvt. Ltd., the cab-leasing arm of taxi aggregator Ola, has received a loan for $156.3 million from Yes Bank to finance the purchase of commercial vehicles.
As a part of the agreement, the vehicles purchased by Ola will remain as collateral, according to the company’s July filings with the Ministry of Corporate Affairs. The loan is for a period of 48 to 60 months and was finalized on March 21.
Ola Fleet has previously taken out loans of varying amounts from Yes Bank in 2016 and Axis bank, HDFC Bank, and ICICI Bank over the past year. Ola launched its leasing business in 2015.
This comes at a time when car leasing businesses attached to rideshare companies have been under high scrutiny. In February 2017, drivers for both Ola Fleet and its competitor Uber’s Xchange Leasing halted work in Hyderabad and Bangalore, India. And a week later drivers called for a strike in the national capital region of Delhi. Driver complaints consisted of excessive supply and low demand with low income from shared rides; many of them have bought cars on loan.
In the case of Uber and Ola within India, both platforms initially flooded the market with drivers by providing extra financial bonuses, but have begun cutting these incentives in order to reduce company overhead. However, with drivers locked into paying back loans, it ensures a steady supply of drivers who cannot easily leave a rideshare platform after the incentives have disappeared. Uber is currently exploring a consolidation or outright sell of its Xchange Leasing program.
Ola did not respond to a request for comment by press time.
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