Even as startups and businesses are suffering during the nationwide lockdown amid the coronavirus, some companies are thinking about their most vulnerable partners during the crisis.
Ola has said that it’s creating a fund for its drivers that were impacted by the coronavirus shutdown. “Millions of drivers & their families find themselves without an income today. To support them, we are launching the ‘Drive the Driver’ fund,” said Ola CEO Bhavish Aggarwal. He started things off by donating his annual salary, and said that Ola and its employees would together pool in Rs. 20 crore. “I’m contributing my next year salary and Ola along with employees will contribute ₹20 cr to the fund,” he said. “Even a small contribution will have a lasting impact on the well-being of millions of families. We invite everyone to join us and help the entire driver community in their time of need,” Agarwal added.
2/2 Even a small contribution will have a lasting impact on the well-being of millions of families. We invite everyone to join us and help the entire driver community in their time of need. #StrongerTogether. https://t.co/2LHrzYLNvc
— Bhavish Aggarwal (@bhash) March 27, 2020
Ola has now opened up donations to its fund to ordinary Ola users, and is requesting them to donate.
We’re very encouraged by the early support for the #DriveTheDriverFund but we have a long way to go. I urge you all to continue contributing generously. The millions of Cab, Auto, Taxi drivers and their families need your support in these tough times. https://t.co/2LHrzYLNvc pic.twitter.com/mowgaiSMJd
— Bhavish Aggarwal (@bhash) March 29, 2020
Ola’s concerns around its drivers are understandable — Ola’s driver partners are particularly hard hit by the lockdown. Not only will they not earn any money as long as cabs are off the roads, but many of them also have to pay EMIs for cars they’ve purchased on loans. The Indian government has eased requirements for the payment of EMIs for the next three months, but Ola drivers would want to make sure that these regulations are implemented quickly. Also, even if their EMIs are waived, they’ll be unable to earn any money while they can’t drive their cabs, which could make it hard for them to meet daily expenses.
To make matters worse, Ola itself isn’t exactly flush with funds. Ola had recorded losses of Rs. 2592 crore in FY19, and the company still hasn’t registered a profit in all the years it’s been operational. And its biggest investor, Softbank, is suffering too — last month, Softbank, which owns several companies which will be hit hard by the coronavirus in its portfolio including WeWork, Uber and Oyo Rooms, recorded the biggest fall in its share price.
Ola competitor and fellow Softbank company Uber faces many of the same concerns. Its shares had been pummeled when the extent of the coronavirus epidemic was revealed last week, but recovered after CEO Dara Khosrowshahi said that Uber had plenty of cash on hand to ride through the crisis — Uber, like Ola, doesn’t lose any money when its cabs don’t run, but simply doesn’t make any money for that period. Uber also runs the Uber Eats arm, which might well see in uptick in business amid the corona pandemic. Ola, though, doesn’t have the luxury of a food marketplace any more — it had shut down Foodpanda last year. Ola would do well to hope that it has enough cash to tide through the crisis — with indications that the lockdown could extend beyond the initial 21 days, and the funding environment likely to be subdued in the coming months, Ola might soon be forced to navigate its toughest test yet.