Ola starts making money, but operational losses exist

According to a media report, ride-hailing service Ola has started making a profit on every ride. However, the company is still reporting an operating loss that stood at Rs. 3,731 crores in FY17.

Ola has announced that it is now ENTR positive. ENTR stands for Effective Net Take Rate. It is the net commission the ride-hailing service gets after taking away costs like discounts offered per ride. The driver incentives offered by Ola has also been reduced. They now vary from 15-20%.

However, profitability will not be easy to achieve for Ola. While financials for FY2018 are not available, Ola expects an operating loss of Rs. 1,235 crores for the financial year ending March 2019. For the year ending March 2020, the company expects to see a profit of Rs. 746 crores.

Along with reducing driver incentives and customer discounts, Ola is also pushing its subscription plans like Select and Share Pass and entertainment service Ola Play. The company claims that they have not sacrificed growth or given up market share to main rival Uber.

Source: Economic Times