One of India’s most-funded and widely celebrated tech startups has for long been at the receiving end of customer grievances about poor and faulty services. Now things may have gone too far.
On Oct. 14, a 15-year-old boy died after getting electrocuted at an OYO Rooms hotel in Southeast Delhi. The boy, who was visiting Delhi from Dehradun, in neighbouring Uttarakhand, to participate in a shooting competition, was reportedly bathing when his roommate heard a shout. When the hotel staff entered the bathroom from the ventilation window, they found him lying unconscious.
This incident, one’s own terrible personal experience, and grievances of other customers made public on OYO’s social channels and other platforms, indicate a long history of accommodations that don’t match the company’s rosy financial portrait.
OYO did not respond to a detailed questionnaire from Quartz about how it ensures quality and safety at its property.
A saga of substandard services
It was in October 2014 that I tried OYO Rooms for the first time—and swore to do so never again.
We were a group of four, including two German friends who had come to holiday in southern India. For one of them, it was the first time in India and I wanted to make sure he would remember the trip fondly. I made an OYO booking in Wayanad, Kerala, weeks before the trip and even called the property to make sure everything went smoothly.
In the photos, the hotel appeared to be a three-star accommodation. In reality, it was somebody’s house that had been lying vacant for years and had been opened just the day before our arrival. The two rooms in the house we were given had walls so damp that every few minutes, through the night, the plaster would chip off from one corner or the other.
My embarrassment aside, the accommodation was so uncomfortable we decided to cut our three-night trip short and return to Bengaluru the next morning itself.
Then, OYO was still a year-old and we all gave it the benefit of doubt. Yet, all these years later, not much seems to have changed.
On Sept. 14, stand-up comedian Garv Malik shared on Twitter his experience of staying at an OYO Townhouse in Kolkata, with a video of huge rats running around his room.
While the comic made light of the situation, the episode highlighted a serious health and safety hazard. Besides, this wasn’t the only incident involving rodents reported at an OYO property.
Earlier this month, Mohamed Najiullah, a senior consultant at software consultancy firm ThoughtWorks, created a portal called “oyo-ruined-my-anniversary.com” to share the story of how he and his family got stuck on a remote island in Andaman with poor mobile network connectivity as the hotel staff refused to acknowledge a booking made through OYO.
“Soon after I landed in Chennai, I came home and called up OYO. I explained all of this to the executive and he put me on hold in order to transfer me to a manager. Someone then answered and I went ballistic. I told him all the pain I had experienced because of OYO and how OYO ruined my wedding anniversary.
After listening to me for 10 minutes, the person then responded saying “What can I do?”. I couldn’t believe my ears that this person was being so callous about such a big issue. I told him to address my issue and that was when the person told me “Sir, I’m also a customer. I called regarding a complaint myself”.
OYO had connected me to another customer.”
A simple search for #OYORooms throws up countless horror stories of people who have had bad experiences with the company.
The irony is that while customers are dealing with serious inconveniences and life-threatening hazards at their properties, OYO has been projecting a rosy image with its multi-million dollar funding plans and overseas expansion.
The company claims it offers over 850,000 rooms across more than 800 cities and nearly 23,000 OYO-branded hotels. It also calls itself the world’s third-biggest hotel network. In August, the company said it had signed a deal to buy the famous 657-room Hooters Casino Hotel in the American gambling and entertainment hub, Las Vegas.
In September, the Gurugram-based company said it had raised $1 billion (Rs7,200 crore) in fresh funding from SoftBank Vision Fund, Sequoia Capital, and Lightspeed Venture Partners. The three had already pumped in $800 million with a promise to invest $200 million more, OYO said. The funding made OYO India’s latest unicorn—private startups valued at over $1 billion—and the second-most valuable one after One97 Communications, which is the parent company of digital payments app Paytm.
So far, OYO has raised up to $1.7 billion in 12 rounds from some of the most prominent global investors and companies, including Softbank, Sequoia, Lightspeed, Grab, Airbnb and Didi Chuxing, according to Crunchbase.
Last week, the company said it plans to raise another $1.5 billion, including the 26-year-old founder, Ritesh Agarwal, bringing $700 million from his own wealth into the company.
Yet, how far can all these billions take a company that’s now likely to be at the centre of an investigation over the boy’s death in Delhi?