Anand Mahindra (L), chairman and managing director of Mahindra Group, and Bhavish Aggarwal, CEO and co-founder of Ola
Cab aggregator Ola and auto major Mahindra & Mahindra Ltd announced a strategic tie-up on Thursday. The alliance will aim to increase the fleet strength of Ola by 40,000 cars over the next two years. The addition to the fleet will primarily be the Verito, earlier called Logan.
"This is not just a tie up between Ola and Mahindra Auto but the entire group," said Anand Mahindra, chairman, Mahindra Group.
Ola drivers will be eligible for Mahindra financing, where they would get up to 100% financing on new, as well as, pre-owned vehicles. The services of Mahindra’s insurance arm would also be offered to drivers who, under the scheme, would paid lower premiums.
Ola drivers would also fall under M&M’s CSR scheme.
The drivers would get accident insurance worth Rs 15 lakh, their children would get scholarships up to class X and XII and the drivers would get discounts on spares.
Mahindra, however, insisted that this was not an exclusive tie-up, leaving the door open for alliances with Ola’s biggest rival in India — Uber. The financial incentives, however, would be exclusive and wouldn’t be offered to another fleet company.
Mahindra also left the door open for Ola to encourage its drivers to purchase pre-owned cars from First Choice.
Bhavish Aggarwal, co-founder and chief executive, Ola said that for now there would only be a conventional fuel car exchange for now but saw the possibility of adding Mahindra’s electric vehicles to the fleet soon.
"This is an initiative whose time has come, one that meets the current future needs of the the Indian consumer, particularly young who prefer shared mobility solutions. This tie-up will have a positive social impact on the lives and prospects of 40,000 drivers and their families," Mahindra said.
Sources said that Ola had been working on the this deal for a few months and had been spurned on to close it once Uber and Tata announced its partnership.
"As part of the strategic alliance between the two companies, we have created a unique solution to help tens of thousands of drivers," said Aggarwal.
However, this alliance does not give Mahindra a stake in the $5 billion valued Ola.
This is not the first time a fleet company has tied-up with an auto manufacturer. A few weeks ago, Tata had announced a similar partnership with Uber, while Lyft in the US has an alliance with General Motors. At Lyft, GM owns a significant portion of the third biggest fleet taxi company in the world and had recently tried to buy out the start-up at a $6 billion valuation. The claims were officially denied by both parties but reports filtered out that Lyft held out for bigger valuation.