Almost 18 months after its acquisition by rival Ola, ride-hailing startup TaxiForSure (TFS) will now cease to exist.
Bengaluru-based Ola on Aug.17 said it has moved all the TFS drivers and customers to its own platform, discontinuing the brand. Ola has absorbed as many TFS employees as it needed; the rest have been let go of.
“For positions that cease to exist as a result of this transition, we are offering enhanced severance benefits and outplacement services to help affected employees pursue new career opportunities,” Ola said in a statement.
The number of employees laid off could be between 700 and 1,000, media reports said. The company refused to confirm any number.
TFS was founded in 2011 by Indian Institute of Management-Ahmedabad alumni Raghunandan G and Aprameya Radhakrishna. The company was backed by Accel Partners, Bessemer Venture Partners, and Helion Venture Partners and had a strong focus on the economy segment, with innovative offerings like Tata Nanos cabs.
Ola acquired TFS in March 2015 for $200 million (Rs1,200 crore, then) in cash and equity. At the time, TFS had 1,700 employees. Since then, the company has seen a massive exodus.
Post acquisition, Softbank-backed Ola decided to run TFS as a separate entity. But in March 2016, Ola launched its low-cost service Ola Micro that absorbed TFS’s drivers and customers.
Ola Micro was launched to take on American rival Uber’s affordable category, UberGo. In April, Ola said the Micro category was doing more rides per day than all of Uber India’s segments combined.
The closing down of TFS comes just weeks after Uber sold its China business to local rival Didi Chuxing—a move that is expected to intensify Uber’s focus on India and the taxi wars in Asia’s third-largest economy.
Following the deal, Uber is now Didi’s largest shareholder. Didi, on the other hand, is an investor in Ola.
TFS’s shutdown could be part of Ola’s preparation for battle with its investor’s investor.