Mahindra & Mahindra Ltd and ride-sharing firm Ola have formed an association that will see the Indian automaker make $400 million in profit over the next two years by selling cars and provide services to Ola.
In return, Ola Cab will get access to a one-stop-shop for vehicles and also get services for its drivers. Drivers on the Ola Cab platform will be able to benefit low-cost financing for their vehicles, get insurance profits and post-sales maintenance services as part of the two companies call the Mahindra-Ola package.
The creativity is expected to bring in additional $400 million profit of business — through purchase of cars and financing — for the Anand Mahindra-Chairman of Mahindra and Mahindra.
Recently, Uber Taxi stated a similar ‘strategic‘ partnership with Tata Motors for its driver community. Uber Taxi, the world’s most valuable startup, counts Tata Opportunity Fund as a depositor.
Mahindra and Mahindra is the latest automaker to partner a ride-sharing firm to protector against a shift in consumer choice away from vehicle ownership in favor of buying transport by the mile or minute.
Previously this year, Volkswagen AG signed a $300 million agreement with Gett, Toyota Motor Corp said that it would invest an hidden amount in Uber Technologies Inc, and General Motors invested $500 million in Lyft.
Mahindra said that his company’s union with Ola will give both access to new business chances. Ola co-founder and chief executive, Bhavish Aggarwal said that, “There requirements to be a more mass good quality way of commuting and that is what we have built. This association will scale up the supply significantly because of the value proposition for the drivers.”