Ola is going to save 100 Cr INR per year by moving to their in house mapping solution according to Bhavish Agarwal.

At a take rate of 30%, Ola needs to generate a top line of ~330 CR to pay for Google Maps.

At 25%, 400 Cr.

Now these 100 Cr of savings can be used on demand side or supply side expenditure.

My guess is that they would do neither.

They are in a rough spot.

Driver unions are fighting to ban their 2 wheeler rides business.

And for cars, Ola is moving to a subscription model to avoid GST payments + stop market share loss to Rapido & Namma Yatri.

Earlier, their take was close to 30%.

If a driver was doing 10 rides at an AOV of INR 100, they would be making INR 300 per day from one driver.

Now a driver would pay a subscription fee of 30 INR/day.

From 300 INR to 30 INR. It is a big big drop.

Their top line (take rate * rides) is decimated. Their bottom line too.

And now they are a subscription company with far lower revenue.

Namma Yatri, a private company competitor can pivot to it. So can Rapido.

An IPO-bound company can’t.

Yes, with this new subscription fee they probably wouldn’t pay driver incentives. But even then their numbers would look worse in 2024 than in ‘23.

So, of course, they have to bring down the IT COGS.

It is not a matter of deshbhakti. It is a simple exercise in cutting costs. No matter what kind of spin Bhavish puts on it.