Ola to sell 5,000 used cars to Dbest cars for Rs 125 crore

The company said it would replace the old vehicles with new ones.

A source aware of the matter told ET that Ola was planning to replace them with electric cars.

Ola Fleet Technologies leased cars to cab drivers who operated exclusively on the Ola app pre-pandemic, when demand for the service exceeded the number of cabs on the app, leading to higher wait times.

With the onset of the pandemic, however, more than 33,000 cabs were returned to Ola as the ride-hailing business crashed amid the nationwide lockdowns, sources said.

Multiple sources told ET that the company has since struggled to sell these vehicles, which were lying idle at garages across India.

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Around 8,000 out of the total cars had been sold to various driver partners and other entities since the virus outbreak, a source said.Dbest Cars is the biggest buyer of used cars from Ola to date. Ola Fleet Technologies will still have thousands of cars that are four to five years old in its books.

“Sale of used commercial cars is totally different from the sale of normal used cars (white plate),” said Gulshan Rao, director of risks and brand protection at Ola. “For the sale and purchase of used commercial cars, there are a lot of obligations which need to be carefully fulfilled and as a responsible company, we need to choose the right partner for this so as to avoid any future disputes.”

Ola is set to enter the EV cabs space to take on BP Ventures-backed BluSmart and Uber, ET was the first to report on January 4.

Sources told ET at the time that the company was likely to lease EV cabs to drivers, though the exact business model had yet to be decided. The company is set to start the pilot in Bengaluru with about 1,000 electric cars after which it would scale it up to 10,000.

“We are fortunate to be able to get the opportunity to work with India’s largest radio taxi company and feel proud to have been chosen by Ola to help them dispose of their thousands of used commercial vehicles,” said Dinesh Singh, MD and CEO at Dbest Cars India. “This association will provide an accelerator for the growth of our startup.”

Some cab drivers have dragged Ola Fleet Technologies to court as the company started selling vehicles for which the drivers had been paying a lease amount allegedly following an assurance that they would get to own these vehicles in future.

Despite numerous consumer complaints about declining service quality, Ola founder Bhavish Aggarwal has said on multiple occasions that the ride-hailing business is “highly profitable” and “a mature business”.