India’s unicorns continue to bleed.
Taxi aggregator Ola reported a loss of Rs2,313 crore for the year ended March 31, 2016, according to regulatory filings by ANI Technologies, the owner of the firm. The year before, it had reported a loss of Rs796 crore. In 2015-16, the firm earned a revenue of Rs758 crore, the data sourced by Tofler shows.
Ola’s expenses for the year shot up to Rs3,071 crore, which means, for every rupee of the revenue it earned, it spent at least Rs4. Last year, its total expenses were Rs899 crore.
Unicorns like Ola are spending big on employees and marketing, which ends up eating into profits. During 2015-16, Ola’s employee benefit expenses jumped by more than five times to Rs461 crore from Rs85.16 crore a year ago. Ola hasn’t replied to Quartz’s query about this huge jump yet, and we’ll update the copy once we receive an explanation.
Ola has received a total funding of $2.3 billion in the seven years that it has been operational.
Valued at about $3.5 billion, Ola is present in over 100 Indian towns and cities and has over 50,000 taxis and auto-rickshaws in its fleet. Uber, on the other hand, is present in at least 29 Indian cities. For the US-based Uber—one of the world’s most valuable startup—India has become a critical market after it sold its business in China in August 2016. India is its second-largest market after the US in terms of number of trips.
But both Ola and Uber have faced a backlash from drivers in recent months. Cabbies across India have protested the drop in earnings through these apps. Driver associations want the companies to reinstate the bonus system and revise the minimum fares. Additionally, banks are gradually decreasing their exposure to taxi drivers in some cities or tightening the criteria for credit-worthiness.