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Indian ride-sharing service Ola is preparing to go up against Uber in one of the company’s most lucrative markets: London.
Ola, which is based in Bangalore, has been granted a license to operate in the city, London’s transportation regulator said Thursday. It’s now recruiting drivers ahead of a launch in late summer or early fall.
The move into the British capital is a huge opportunity for Ola.
London is one of five global cities that account for nearly a quarter of Uber
(UBER) bookings, along with Los Angeles, New York City, San Francisco and S?o Paulo.
Competition in the city is heating up. Bolt, which used to be called Taxify, returned to London last month. Kapten, a French startup backed by BMW
(BMWYY) and Daimler
(DDAIF), has also been generating buzz.
Yet Ola, a powerhouse in India that’s also expanding in Australia, New Zealand and other UK cities, poses the biggest threat.
The company, which already has 10,000 drivers in UK cities like Liverpool, Reading and Bristol, is willing to compete on cost.
While its fares will be comparable to Uber’s in the long run, Ola plans to offer discounts when it first enters the London market. It will also give drivers a larger cut of their rides, which could help with recruitment.
The arrival of companies like Ola could put pressure on Uber in the near term, analysts at Morgan Stanley said in a note last month. But the company has also become more sophisticated at fending off competition, they said.
Uber’s run in London hasn’t been easy.
The city gave Uber a shock in 2017 when it declined to renew its license, saying the company was not “fit and proper.” Uber appealed the decision and was later granted permission to operate for 15 months.
Shorter licenses spanning months, not years, have since become the norm for ride-hailing companies. Ola’s license also runs for 15 months.
