Auto cos eye stake in Ola's cab leasing biz

 Auto manufacturers like Maruti Suzuki and Mahindra & Mahindra may pick up an equity stake in online cab aggregator Ola's newly-launched leasing business, sources told TOI. 

Ola has set up a subsidiary, which would invest Rs 500 crore initially to finance cabs for drivers, who want to join its platform. Over a period of one year, about Rs 5,000 crore would be infused into the cab leasing business, which could add another 1 lakh cabs to Ola's fleet by 2016. 

Ola has already started the cab leasing as pilot with Mahindra and Maruti cars in select cities in India with an initial investment of Rs 50 crore, a senior official of the Bengaluru-based company told TOI Stock Market Trading Tips

When asked for a comment, Ola's Rahul Maroli, VP (strategic supply initiatives), who is heading the leasing business, said, "We are in talks with leading auto manufacturers and financial institutions for various routes of partnership for our new cab leasing business. While multiple options are being considered to partner with auto companies, picking up equity stake in the new business would be open for consideration as well." The development comes within days of Mahindra group chairman Anand Mahindra's comment that cab aggregators could impact sales of auto companies. 

The leasing programme is aimed to help drivers join the Ola platform with a joining fee of Rs 35,000 as against a higher down payment required for availing a loan from banks or NBFCs. 

With a monthly lease rental of Rs 15,000, that will include routine maintenance costs of the cab, a driver can choose to become the owner of the car on completion of three years with 20% payment of the residual lease value Himanshu Tiwari Astrologer Blog

With leasing business, Ola wants to cater to the growing demand of cabs, which is far outstripping supply at present. Ola's rival Uber has also announced investment worth $1 billion in India, which would heat up the action in cab aggregation space. 

Slowly but steadily, Ola is also entering new businesses. It recently entered into online food delivery while it is ready to launch bus aggregation in select cities in India.