Bhavish Aggarwal, IIT Bombay alumnus and co-founder and CEO of India-based ride-sharing giant Ola Cabs, told the more than 400 IITians in his keynote speech at the IIT Bay Area Leadership Conference last month about how coming from a middle-class family to running a taxi business with a billion-dollar valuation and the challenges he faced, success, and leaving behind in the race a corporate giant like Uber.
Aggarwal said for a boy coming from a city like Ludhiana he had a great experience during his four years at his alma mater and that it was the most transformative of his life while meeting amazing smart people.
“I learned every day and every year and every following… always opened to new context and learning,” Aggarwal said to a packed room at the Santa Clara Convention Center in California.
Aggarwal whose parents are doctors in India said he never wanted to be an engineer.
“In those days we never imaged we would be building a big company or large enterprise. Our dream was first getting out in one piece from college (IIT) and contribute and then follow our passion.”
So, unlike many, he joined Microsoft, where he worked for two years in R&D, which he said was exciting and he learned a lot. But then he got restless to build something of his own, so left his job, and in 2010 launched Ola Cabs.
“It wasn’t an exciting thing for my family, and there was no large company like Uber or Lyft then. So, when I told my parents they asked beta (son) are you opening a travel agency? But I could not explain and said let me try my hand. When you are young there is nothing much to lose.”
As of May this year, Ola had a valuation of US $6.2 billion, according to published reports. The company provides ride shares and food delivery, among other services, with about a million vehicles and auto-rickshaws.
When Aggarwal was asked why, as an engineer and coming from IIT Bombay, he focused on taxis and ride shares, he paused and gave two reasons, said ,“When I started, it was our personal need and a personal frustration of getting good transportation in India when we were in Mumbai, and so a personal frustration led to on ‘How do we solve this?’ And we started a particular business and moved from there.”
Also, there is something fundamental, building mobility and building the future of mobility in India context which will enable opportunity and a lot more economic opportunity for Indians, he said. When you have such a big challenge and such a big opportunity, it means it’s a good problem to solve.
Ola Cabs was founded in December 2010 as an online cab aggregator in Mumbai but now is based in Bangalore and operates in more than 200 cities in India, Australia, New Zealand, and Ola auto-rickshaw in the UK. The company this past month announced opening an R&D facility in the San Francisco Bay Area.
Aggarwal agreed that Ola is facing tough competition from Uber and Lyft.
“In our rapid scale-up phase we had really complex and tough competition with Uber, but we had really outthought them and outsmart them not just outspent them,” he said.
Ola remains dominant in India even though with tough competition from Uber. When that renowned ride-share company entered in 2013 entered India, Ola was a tiny 2-year-old operating in two cities with a mere half a million dollars in the bank.
And unlike China that attracts huge capital India doesn’t, he said.
“It is tough for an Indian company to attract the kind of capital that American company could spend on India. So that is how the competition started, but right from the start we were clear what is our strength, and our strength was we know India better,” said Aggarwal. “So, we ended up building our business model customized to the India reality in every aspect.”
He said a lot of Indian consumption resides beyond the top five cities. So, Ola ended spreading in towns in India, though it was tough to do business in states like Bihar and Uttar Pradesh, but “we did reach there.”
“When the competition was at its peak, Uber was outspending Ola almost 5:1 to the dollar. “Yet, we held on to our market share, and even today we have 2:1 market share against our competition,” Aggarwal said leading to applause from attendees.
They had to really outspend but were never really able to gain dominant market share in India,” he said. “Our mission is ‘How do we build and how do we solve the mobility problem around the world?’ And our ambition is to build one of the leading companies in the world in mobility transportation space … It’s such a critical domain for the modern economy. The technology disruption that would happen over the next couple of decades is going the define the world leading companies in this space.”