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Ola Shuts Food Delivery Business Ola Café

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Ola Cafe-001

Exactly a year back, Ola launched it’s online food delivery business Ola Café and now it is no more. It seems Ola has shut down Ola Café as the tab does not appear anymore in their mobile app now.

While Ola has not announced it officially, it is clear that they have not been able to scale up the business. Two people who are aware of the development told Mint that the Ola Café business failed to meet the expectations and faced stiff competition from incumbents like Swiggy, Zomato, Tiny Owl and others.

Ola Café was not Ola’s main line of business – they had limited menu and delivered in very limited areas. On the other hand the competition had far more choices for the users. To scale up the operations for Ola Café, they needed to bring far more restaurants with comprehensive menu offerings and needed to cover far more areas.

To deliver food Ola used their partner drivers on the Ola Cab network, which seems to have not worked. Obviously, the cost of delivering food using a cab might have been much higher than a two-wheeler which is what is used by most food delivery boys.

Apart from this, Food-Tech space itself has been quite a difficult for startups. Even after 2-3 years of existence, most of them are burning huge amount of money. Funding has also dried up. Many smaller food-tech startups have already closed down and larger ones like Zomato and Tiny Owl have cut down their work force. This space is also seeing consolidation with smaller food-tech startups are getting acquired by bigger ones!

Now that funding has dried up, it makes sense for Ola to use the money more judiciously and focus on cab market, in which they are the market leader.

In the hindsight, Ola did one thing right – they only launched in limited area and did not try to expand too much saving them money. It was a pilot which did not work well, and they closed it down.

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