Ola officials have offered car ownership to at least 1,000 drivers on payment of INR 1 Lakh and above from each driver, according to sources
Ola is also in talks for similar out-of-court settlements with drivers in other cities like Jaipur and Delhi, Inc42 sources added
This follows a series of FIRs which were lodged against Ola CEO Bhavish Aggarwal and the company under Sections 420 and 409 of the IPC
In a new twist to the ongoing battle over ownership of cars between ride-hailing giant Ola and thousands of its drivers across the country, the Bengaluru-headquartered firm has offered an out-of-court settlement to at least 1,000 drivers in Lucknow, sources in knowledge of the development told Inc42.
Ola officials have reached out to several representatives of drivers in Lucknow, offering them car ownership against payment of over INR 1 lakh by each driver, the sources said.
SoftBank-backed Ola has further offered to pay back security deposits worth INR 17,000 to drivers as part of the settlement, one of the sources said.
Earlier, Inc42 reported that Ola drivers across many cities have come together to fight legal cases against the ride-hailing firm for “cheating” them by reneging on the contract for its car lease scheme.
Advocate Ganga Yadav, who is representing the drivers in the ongoing litigation in Allahabad High Court, also confirmed the development to Inc42. However, he said that Ola’s demand for payment of INR 1 Lakh and above by each driver is “substantially high”.
“We have held discussions amongst the Lucknow drivers and the maximum amount each driver is willing to pay is INR 50,000. In case the company agrees to this, the drivers will take the ownership of the cars. But the ongoing case being fought in Allahabad High Court (Lucknow Bench) is going to set a precedent for various other litigations which are being fought in other states. An out of court settlement, on the other hand, will not have such validity,” Yadav explained.
A source quoted above further said that Ola is working on similar out-of-court settlements with drivers in other cities like Jaipur and Delhi.
“Although the drivers are liable to individual decision making, the larger opinion has been that the cars lying in the service yards for couple of years are now costlier than the brand new cars, and for many drivers, the payout beyond INR 50,000 won’t be possible as it is beyond their means,” a Lucknow-based member of a driver’s representative body said.
Failed Arbitrations In Past
Sheikh Salauddin, general secretary of the Indian Federation of App-based Transport Workers (IFAT), said that discussions had taken place in the past also between the ride-hailing company and its drivers. However, those discussions failed due to the high price quoted by the Bhavish Aggarwal-led company.
“Uber, in fact, also worked out similar arrangements with drivers after COVID and each driver had to pay somewhere between INR 30,000-INR 40,000 to get the car ownership with legal papers signed,” Salauddin informed.
He further said that Ola has silently shut the car lease programme started in 2015. “The vendors have been informed not to publicise the car lease programme anymore after the news reports on this scheme came out last week,” Salauddin added.
Inc42 has sent a detailed questionnaire regarding the above developments to Ola. The story will be updated as and when the company responds.
Ola’s car lease programme offered drivers a chance to own a car by paying a daily rental and a refundable security deposit. However, the pandemic put brakes on the flagship car lease scheme run by Ola Fleet Technologies as its business was hit hard.
The company’s revenue slipped to INR 43 Cr in FY21 from INR 545 Cr in FY20, while loss ballooned to INR 686 Cr in FY21 from INR 377 Cr in FY20, according to Ola Fleet Technology’s financials filed with the Ministry of Corporate Affairs.
In its earnings report, the company noted that the pandemic and lockdowns impacted its revenue badly. “Ola is the largest vehicle lease provider in Asia, considering the fleet size of 32,879 vehicles as of March 2021. The FY20-21 has been the year of the pandemic with all the vehicles in yards for the most part of the year, yielding negligible revenue,” it said.
The driver associations have alleged that the cars were taken away by the ride-hailing firm in March 2020 during the lease period, allegedly under the pretext of maintenance, and were never returned to them.
Ola is currently named in at least 4 FIRs filed in Lucknow and Hyderabad under Sections 420 and 409 of the Indian Penal Code, amounting to criminal breach of trust subjected to an imprisonment period of up to 10 years and a fine.
