AutoRaja goes belly up, existing team to join Ola
Chennai, India | Red Newswire | Jan 28, 2016 Last Updated at 6:00 PM IST.
The earliest auto-rickshaw aggregator, AutoRaja has wound up its services and the remaining team is expected to join Ola. Over the past two months, the company has been experiencing a decline in the customer base. The shutdown began in August itself and completed in December. The founders, Aishwarya Raman and Anubhav Agarwal will continue to hold their promoter stakes and will now head the Ola’s arm of auto-rickshaw operations.
One of the people familiar with the matter said, “Trying to expand in a market characterised by cut-throat competition and burning cash, AutoRaja had made some miscalculations, forcing the promoters to feel it was sensible to suspend the service.” However, Ola has refused to comment.
AutoRaja had 800 drivers on its platform, but was able to provide leads to only 100 of them. Auto-rickshaws still connected with the firm will now get their leads from Ola. The Shell foundation had invested Rs. 16.5 lakh in AutoRaja. However, it could not raise another funding from Chennai Angels.
Naru Narayana, an investor with Chennai Angels said, “The biggest challenge in aggregating autos is acquiring and retaining drivers, not to mention making them comply with rules like not to overcharge. It would take years from now to make a business running a fleet of auto-rickshaws profitable.”
Source: ET Bureau