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Indian ride-hailing company Ola plans to “soft launch” operations in London in the coming weeks, with a full launch slated for mid-January 2020, sources told CNBC. Ola kicked off its UK operations in Cardiff in 2018, and has since expanded to 27 boroughs in the region. Ola says it already serves 7 million customers in the UK, according to TechCrunch, which would represent under 6% of its global user base of 125 million as of 2018.
Ola will be a new entrant in a highly competitive market currently led by Uber, but the Indian company could have an edge thanks to its enhanced safety measures. Uber has 3.5 million riders in London, but its positioning is tenuous: Local authorities stripped the ride-hailing giant of its operating license following a two-month probationary period.
Though Uber plans to operate in London while it appeals the ruling, the company has an uncertain future in the market, due to what London authorities called a “pattern of failures” to address compliance with safety standards. By comparison, Ola said it will offer extensive safety features including an “industry-first” driver facial recognition system to continuously authenticate driver licenses. This could translate into a competitive advantage, should Ola manage to curry favor with local authorities.
Success in London could give Ola the springboard it needs to enter the broader European market. Beyond India and the UK, Ola only operates in two other markets — New Zealand and Australia. If Ola is able to appease local regulators in one of Europe’s most important markets and gather valuable information on the local population and their transportation needs, it could put itself in a better position to enter other cities.
Regulators across Europe could be encouraged by Ola’s ability to meet the standards set by the TfL, which would make it easier to enter new markets. Furthermore, having a better understanding of consumer needs could give Ola confidence that it can meet the specific needs of local consumers, enabling the company to quickly capture market share. In the mobility-as-a-service market, which is projected to be worth $106.8 billion by 2030, up from $6.8 billion in 2020, Europe owns the largest geographic share.
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