Do you remember the first time you used Ola?
A car showed up where you stood. No bargaining. No awkward conversation about routes. One tap and the problem was gone. That was real magic.
Use Ola today and the spell is broken. Drivers cancel. Prices spike. You are back to planning instead of moving. The original problem is solved, but a new and uglier one has replaced it.
This did not happen because Ola lost focus or failed to build new things. It happened because the business was built on a subsidy engine, not a stable system.
I was inside Ola during the high-growth phase. The playbook was blunt: burn money to solve two problems at once. First, the driver supply problem. We paid incentives so high they broke reality. Some drivers were clearing close to Rs 1 lakh a month. That was not income — it was a temporary distortion. When incentives stopped and a 25% commission structure took over, take-home crashed to around Rs 30,000. Exits started immediately. Second, the rider habit problem. Fares were kept artificially low to build behaviour patterns. It worked. But when prices moved toward real cost, riders felt cheated. The value perception collapsed.
The result was worse than the original problem: a large pool of drivers who felt trapped by the commission model, and riders who remembered paying less and expected to pay less again.
That is the crack Rapido walked through.
Rapido did not try to outgun Ola on cars or marketing spend. They fixed the operator side of the system. The move was simple and direct: a fixed subscription fee for drivers. For a driver, the calculation is obvious. A Rs 350 trip on Rapido puts Rs 350 in the driver’s pocket. The same trip on Ola leaves roughly Rs 263 after commission. No sales pitch needed. Drivers did the selling themselves. I was told to install Rapido by an Ola driver.
So why does Ola not simply copy this model?
Because the commission structure is not just pricing. It is the story that justified their valuation. Change it and reported revenue collapses. They are boxed in by their own narrative — the one they told investors, the one their financial model depends on.
This is the operator lesson most founders miss. Solving a user problem gets you entry. Solving it with fake economics gets you trapped. Subsidies do not build loyalty. They build expectations you cannot afford to meet. When the cash runs out, your system reveals its true shape. And that is exactly when a quieter, more disciplined competitor walks in and takes your drivers, your riders, and your market.
Audit your business today. Find the part that only works because cash is propping it up. That is not growth. That is borrowed time.