Mahindra & Ola | Bonum lex

Mahindra and Ola are now allied forces.

Automobile manufactures Mahindra & Mahindra(M&M) and cab service provider Ola last week announced their alliance. A joint statement from both the company on Thursday, discloses that the strategic alliance aims to finance 40,000 cab drivers with a value of almost $400 millions in a span of two years. The alliance aims to encourage micro-entrepreneurship, by providing drivers Mahindra automobiles at discounted prices, with zero down payment and subsidized insurance premiums, as according to the initial pact.

The tie up comes after Ola’s partnership with Nissan Motor Co. last November. According to which drivers could lease a Nissan Datsun vehicles at month fixed payments, rates of which were fixed such that they would be able to own the vehicle in a matter of 3years.

This present move of Ola, clearly is to try to ward off Uber’s success which is presently looming large on them.

There have been various similar alliances worldwide in recent times. General Motors invested $500million in Lyft. Inc, Volkswagen invested $300million in Gett, and Toyota Motors invested an undisclosed amount into Uber.

The present competition in the ride hailing industry has brought big market players into defining new contours for the industry. It is interesting to see that India is becoming a major playground for such moves.

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