UpGrad Product Management

Competitor Analysis

Introduction to the
Student Name: Sambit Rath
Company
Your Submission
This submission provides a comprehensive study of the cab market and tries to understand the the underlying dynamics of the cab industry. It
tries to study the competition prevalent in the cab industry and does an competitive analysis for Meru Cabs.

It identifies the competitors of Meru Cabs i.e. both Direct and indirect competitors i.e. the players in the market who might be
indirectly influencing the target audience of Meru.

Major direct competitors of Meru Cabs are identified as Ola Cabs and Uber.
Major Indirect Competitors: Bus Aggregators( redBus, AbhiBus) and metros and Railways

However, this analysis mostly confines itself to Meru Cabs and how it fairs against Ola Cabs.

Agenda

1. Comparison of company backgrounds of Ola & Meru

2. Comparison between their business models
3. Strengths and weaknesses of Ola and Meru
4. Product details and performance analysis of both the companies
5. Predicting the future initiatives of Ola Cabs so that Meru can take necessary steps and hold on to its competitive advantage

2
Company Backgrounds of OLA and Meru
OLA MERU
Goals To bring convenience, price transparency and standardization to Meru aims to provide best in class service to each geography where they are
consumer Present and they want to epitomize industry best service reliability and quality .
booking car rentals and cab services Bhavish Aggarwal

Mission Olas mission is to connect all the car operators and taxis on a single Meru derives its name from Mount Meru which, according to mythology,
platform and facilitate their driver (partners) so that they achieve Is unshakable during any kind of turbulence. Meru wants this reliability to reach their
economic stability and increase professionalism. customers. They want to serve their customers in the most efficient and reliable
manner

Strategy Ola focusses on backend interface to ensure a high standard of Meru aims to control the experience provided to the user.. In order to achieve the
consumer experience. which is reliable. same., they purchased and maintained their own fleet of cars and then franchised the
cars to drivers. The drivers were imparted proffessional training.

Employees Wikipedia page of Ola gives us the information that there are Meru Cabs is headquartered in Mumbai and has around 500-100 employees. The fleet
around 6000 employees working for OLA. Apart from direct size of Meru is Meru Cabs has a fleet size of 20000+.
employees,Ola partners with over 4,50,000 drivers all over India and
is headquartered at Bangalore.

Revenue Ola generated about 758 crores in 2017 but loss widened to 2313.6 Meru Cabs is the only cab company to nearly break-even
Crore.. This indicates the high cost of user acquisition and poor Total revenue INR 600 Crores approximately
customer retention by the company Recently coupled its service with Google Now & Facebook Messenger Bot which
led to a surge in bookings

Funding Ola raised over $1.2 billion in 8 rounds of funding from leading India Value Fund(IVF), a private equity firm owns a stake in Meru
venture firms such as Softbank group, DST global, Tiger Global, etc. Latest funding:$75 million in 2 rounds to increase brand awareness from IVF and
Their latest funding was from Didi Chuxing, Ubers major competitor Brand Capital
in China. It was worth 550 million USD. Has been profitable since the beginning

Founders Details Ankit Bhati and Bhavish Aggarwal IIT Bombay graduates from 2009 Neeraj Gupta, founder of Meru Cabs partnered with IVF to conceptualize Meru Cabs
and 2008 batches. Ankit has had job experience at startups such as and is Managing Director of Meru since 2007
QED42, Makesense and Wilcom after IIT .Bhavish has prior job exp
at Microsoft for 2 years after his B.Tech in CSE.
 OLA vs Meru: Business Models
OLA MERU

Presence Ola is the largest cab provider in India, the status which attained Meru is present in lesser number of cities, but they are profitable.It is
in a 6-7 year span. It has presence in all metros and now strengthening across Indian geography. It was present in 23 cities (2015 data)
expanding to tier 2 cities. It has a presence over 100 cities in India.

Target Market Target market is same for both the companies. Both of them aim to make the life of public easier by providing taxis at low costs who were earlier over
charged by local taxis. These companies plan to end the monopoly of the local players. Both of them target consumers who want hassle free and timely
rides and with a reasonable cost.
.

Business Model for Ola receives revenue by Meru has 2 models

1) %ge commission from trips completed by driver partner (15- 1) Meru leases Car to drivers, who pay a fixed amount to Meru per day
Revenue Generation 20%) 2) Driver might own the car and after each ride, Meru takes 15-25% of the cut.
2) Corporate Tie ups and Events i.e. OLA provides heavy discount
to the rides taken by a certain companys executives or from Meru promises to provide the drivers a minimum fixed number of rides each day.
the rides aimed at a certain event location. The discounts are
offset by the volume of rides taken. Meru owns at least 50% of its fleets caters to the public who visit airport and who
3) OLA has OLA money wallet and charges merchants based on are visiting the cities from airports. This builds visibility and attracts corporate tie
transactions. OLA money can be used not only for OLA rides ups.
but also for paying at restaurants, eateries , but products .
online etc. Discounts are given as well
4) OLA started its own car leasing service aiming to aid drivers
who dont own a car

Past Shifts in the Ola, when started tried to own the fleet of cars. But it faced Meru owned 100% of their fleets when they started but gradually became an
difficulty when it tried to expand into other cities wherein the cost aggregator. Now they own 50% of the fleet and rest belong to other drivers. It plays
Business model if of operations was way more. Hence. It transformed into an the role of aggregator for them. And opts for a revenue sharing model
Any aggregator and went for aggressive expansion. .
 OLA vs MERU:Strengths and Weaknesses
OLA MERU

Strengths Easy to expand since it is purely a cab aggregator
Being the #1 cab provider in India, Ola has been able to get
multiple rounds of findings in spite making losses
Caters to many market segments, OLA prime , mini, OLA auto
Lux for luxury rides, XL for renting SUVs. etc.
Good customer experience with free Wi-Fi,
Meru training academy To prepare the drivers professionally for the job
Sustainable revenue model : Already broke even
Meru cabs concentrated being Airport cabsaiming to captured passengers
commute from Airport to city and dominated the same

Weaknesses OLA is affected by unprofessionalism by drivers who own the Owning the fleet increases cost of investments and poses difficulty to expand
car.(No Trainings imparted) to new cities
Inorganic user growth, and inability to scale up technology Only 2 rounds of funding, Uber and OLA have had multiple rounds. Less
affects OLA
Change in State Regulations and Laws has an effect o OLAs
revenue and growth

Challenges Drivers misbehaving in terms of navigation, denial, and app App is slow and keeps on Crashing
abuse etc. affecting the brand image of Ola. (Lack of proper customer service not up to mark
training to drivers) Cases of Drivers not being responsive and refusal to provide service
Issue between Cash and OLA Money-Charging the traveler sometimes
multiple times
Payment delays to drivers leads them to misbehave and ask for
Cash to customers even though they have booked via Ola money
Surge pricing on rides during rains or high traffic is turn off
Ubers expansion in India is affecting OLA, both follow the same
business model.
 Product Details and Performance
OLA
Product Ola has different offerings for different customer segments. They
have Micro, Mini, Prime, Lux, Auto and Shuttle. They have also
come up with shared rides in selected cities as well as hourly
rentals and outstation bookings. In Kolkata they have partnered
with yellow taxis as well. They have introduces OLA pass for
regular customers.
No. of Downloads iOS - Data not available
Android 50M+
Windows - Data not available
App ratings iOS 3.6 rating with 6000+ reviews
Android Rated 4.1 and has 7 lakh+ reviews
Windows Rated 3.5 and has 8000+_reviews
User Experience 1) OLA was the first company to start an app
2) UI/UX is good and OLA money payment wallet was a good
concept
3) App doesnt crash and the UI is very intuitive
4) Booking system is secure, a traveler has to authenticate himself
by giving a code to driver before the driver starts driving
5) Instant Booking and Pre-Booking both are available
Overall Functionality 1)Great design.
2)Ola Cabs took some of the designs from Uber and implemented
in designing its app. Good industry and competitor research paid
dividends
MERU
1) Only 2 offerings regular and genie(hathchback)
2) Intercity booking options
3) Roadside pickup option, the customer can pick a cab and after that they can
book the same ride
iOS - Data not available
Android 1M 5M
Windows - Data not available
Blackberry - Data not available
iOS Rated 3.6 and has 1200+ reviews
Android Rated 3.8 and has 53000+ reviews
Windows Rated 3.8 and has 600 reviews
1) Meru launched its app recently to cater to smartphone population (Late mover)
2) Opted to go for cross platform app instead of native app for each OS which
affected user experience negatively
3) UI is not too god and multiple touchpoints are required before booking cab
1) Average UI and poor User Experience
2) Functionally the app works well but customer satisfaction is less
3) Some terms in apps are poorly explained and user has to call service centre to
seek explanation
Suggested Future Initiatives

As far as OLA is concerned, it is evident that Olas strategy is to capture new markets, increase market share and retain the customers. It
wants to expand to more towns and cities yet it is afraid to lose out to Uber. They cater to all categories of public and have offerings like mini ,
micro, Sedans, SUVs, Luxury, Hourly rental, Outstation etc. in future, they might exhaust the offering ideas and they can also go for expansion
with something like Uber did i.e. expand into food delivery, logistics, grocery delivery etc. OLA money might be catalyst for the same.
Technically OLA is self sufficient with a large number of engineers and innovation is at its core.

Meru can stay where it is, and can expand its presence, revamp its app, concentrate on driver and user experience and should decide whether
they want to venture out into other businesses.
.