Despite challenging times faced by the cab leasing business, cab aggregator Ola has pumped in Rs 100 crore into its leasing subsidiary Ola Fleet Technologies, as per documents filed with the Registrar of Companies.
The fund infusion comes four months after Ola channeled Rs 50 crore into Ola Fleet. This is Ola’s largest capital infusion into the entity since its acquisition in 2015. Ola had bought the radio taxi service provider GCabs, owned by Apra Cabs India, and renamed it Ola Fleet Technologies. The fresh funds will also help it take on rival Uber, which had pumped in about R250 crore last year into its leasing subsidiary, Xchange Leasing India.
Of late, cab aggregators like Ola and Uber have been voicing their concerns on the new GST regime where leasing of cars now attract a higher tax rate of 29% to 43% – depending on the type of car, compared to the earlier tax rate of 14.5 % in the previous tax regime.
Though leasing services are not a prominent part of the business of Uber and Ola, a higher tax rate under GST for cab leasing services could upset the drivers further,who are already suffering on account of lower incentives.
Recently both Uber and Ola had witnessed a 25% drop in the number of cars affiliated to their platform, according to a report by Redseer Management Consulting, due to drop in drivers’ incentives and incomes. Ola Fleet Technologies, had posted a net loss of Rs 13.2 crore for FY16, compared to a profit of Rs3.9 crore during FY15.
In April this year, parent ANI Technologies raised about $250 million in a funding round that was led by Japanese telecom and internet major SoftBank.