Product complaints, unit closures, 'act fast, think later' culture led to recent Ola troubles, say former execs

Ola group continues to be rocked by resignations by top executives — on Thursday, Ola's Head of Talent Acquisition Shikharr Sood quit. Sood was overseeing talent acquisition for the entire Ola Group. Ola is yet to respond to CNBC TV18's query on Sood's resignation.

This highlights the company's recent troubles.

For instance, Ola Electric is barely two years old. The Bhavish Aggarwal-led electric vehicle manufacturer boasts of a speed-to-market without a parallel in the industry. But has the hyper aggression come in the way of doing the right thing?

CNBCTV18 reached out to 10 former senior executives of Ola and Ola Electric to piece together what was going on inside the company that has led to a series of senior-level exits, a raft of complaints about product quality, seemingly hasty decisions to start and shutter businesses. And, a culture of “act fast, think later” seems to be the common thread to Ola’s problems.

In February 2021, Ola Electric started building an electric scooter manufacturing facility, the Future Factory, and managed to get it up and running in seven months. Commercial deliveries of the first e-scooters Ola S1 and S1 Pro started in December, within five months of unveiling the products.

But soon a flurry of customer complaints started coming in. In March 2022, an Ola S1 scooter caught fire in Pune, one of the many recent cases involving EVs, leading to the road transport ministry launching an investigation to establish the cause of fires.

Sources say the probe into five EV firms – Ola, Okinawa, Boom, Jitendra EV, and Pure EV – concluded that defects in cells and inadequate battery management systems led to the fires. The firms have been asked to explain why these incidents took place and why action should not be taken.

Ola has also been served a notice by the consumer affairs ministry due to customer complaints.

At least six of 10 employees we reached out to shared their accounts about issues with Ola’s electric scooter, shutting down of Ola Cars and Ola Dash, and the work environment at the company. On their request, this story has withheld their identity. A 14-point questionnaire sent to Ola Electric received a partial response to two questions.

After Ola Electric began rolling out e-scooters, customers began complaining about a sudden drop in battery performance or going completely dead within days of purchase. There were complaints of sudden reverse movements and panel gaps, too.

Speaking to CNBC-TV18, a former member of Ola Electric’s leadership team said Aggarwal had been advised to delay the launch as the product was not fully ready.

“There was no harm in delaying the launch and one should not have allowed the product to be questioned. The software had not been tested adequately and, as a result, customers faced issues. Software issues led to the malfunctioning of the screen and sudden drop in performance in many cases after the scooter was delivered,” said the official.

The rate of customer complaints was unusually high and most complaints were about battery performance, he said and added the company had not been able to develop all features promised to customers.

E-scooter sales have been dropping – from 12,691 units in April to 9,225 in May to 5,874 units in June. Delivery timelines have come down from a few months to two days. Former employees that we reached out to said that demand for the scooter may have reduced due to customer complaints on social media, recent electric vehicle fires, and the ongoing government probe.

They said the initial high number of bookings and deliveries was because of a short booking window and marketing campaigns, compared to today when a customer can just visit the Ola Electric website and purchase a scooter. As of now, the company seems to have enough inventory to meet daily demand, said a source.

Responding to CNBC-TV18’s query on the drop in sales, an Ola spokesperson said: “We were prepared to see the impact of supply chain constraints, especially in cell shortage in June. We calibrated our business priority for the month to focus on bettering customer service and bought our TAT (turnaround time) within 48 hours. Come July, we are confident that supply chain issues will start fading out and our strong order book will be fulfilled.”

While the company says they have moved to a new operating system, a look at the Twitter timeline of Aggarwal and Ola Electric still shows several complaints about software issues, panel gaps, and battery performance.

Ola was readying to launch Ola Electric’s scooters in 2021 and simultaneously launched Ola Cars, a pre-owned digital car business. This was followed by the launch of Ola Dash, a quick commerce business. This was not the first time that Ola was trying its hand at quick commerce. It also launched a hyperlocal delivery platform in 2015 and shut it the following year.

Many former employees we reached out to spoke about “unrealistic” targets and timelines as a concern. A former Ola Cabs employee told CNBC-TV18 that Aggarwal wanted Ola Cabs, a mature business to grow 4X in six months.

“Ola has a tendency to expand into other businesses and then pull back. Aggarwal does not have the patience required to nurture a business,” he said.

On June 24, within eight months of its launch, Ola announced it was shutting down Ola Cars and Ola Dash. “We chose to repurpose our used cars business and the capabilities to grow our Ola Electric sales and service network. We also decided to wrap up our quick commerce business that organically did not lend itself to our mobility ambitions,” said the Ola spokesperson.

Speaking to CNBC-TV18, former employees have expressed surprise at the closure of Ola Cars. “Ola Cars had emerged as No.2 within six months of launch and was on track to become the No.1 player with a Rs 1,500+ crore business. We were not consulted before the decision to close the company was taken,” said a former Ola Cars employee.

According to sources, the closure of Ola’s pre-owned car business could lead to the exit of at least 600 people. “Perhaps it would have taken a long time for Ola Cars to become a meaningful business for Aggarwal. Only 1.2 lakh cars are sold digitally compared to a 30 lakh market for used cars annually,” said another former official.

Sources also said that Aggarwal had been advised against launching the quick commerce business. “He had been advised not to start Ola Dash because of low ticket size and poor margin. Quick commerce business was a no-go,” said a former employee who was working in Ola Dash.

Former officials believe closing down Ola Cars and Ola Dash may have been part of a strategy to put working capital back into the company ahead of a tough winter and get IPO ready.

Speed to launch new businesses, extreme working conditions, and a hostile environment may be driving the exodus at Ola Electric. According to a source, at least 50 percent of the company’s key executives have quit in the last two years.

Former employees say they were expected to be available for work seven days a week and around the clock. “You do go in knowing that a start-up job will be demanding. But the culture can be very toxic with everyone trying to pull you down to please Bhavish Aggarwal. You can fall out of favour and be moved out of your role in a very short period of time,” said a former Ola Electric employee.

A former Ola Cabs employee highlighted Aggarwal’s hostile behaviour during meetings and a spot termination culture. “It is painful to work there and you lose all your bearings. Bhavish Aggarwal is abusive during meetings. The atmosphere is so stressful that you start doubting yourself. The strategy keeps changing constantly. Senior employees are expected to take all accountability without authority. Public terminations are common,” the employee said.

Some senior officials have said that while they were hired to lead companies and verticals, they were not really given the space to make decisions. On top of that, there was pressure to deliver in months, what established automotive companies deliver in a 3-5-year cycle.

“Having stiff targets is not the problem. The larger challenge is delivering on something that is unreasonable. People coming from traditional companies have found it difficult to adjust to Ola’s work culture and environment. It is more suited for graduates and those in the age group of 24-30 years. Ola offers you great compensation and a fast-learning curve but when you go there you realise there are no free lunches,” said a former employee.

In response to CNBC-TV18’s query about the exit of senior leaders and hundreds of layoffs due to the close of Ola Cars and Ola Dash, the Ola spokesperson gave a standard reply on its business.

“Ola is an ambitious company. We want to lead the industries that we are focused on. Today, Ola is one of the most profitable ride-hailing companies in the world with a very strong balance sheet. Our core continues to be the broader mobility industry, be it ride-hailing, auto retail, financial services or electric vehicles. Today our riding-hailing business is delivering its highest ever GMV month on month. As we continue to grow, we will look at leaner and consolidated teams and capabilities and scale in a manner that keeps our strong profitability intact,” the spokesperson said.

A former employee said that it is for the Board of Directors to now take a call on why the company was struggling to retain talent. For the moment, it seems that the closure of Ola Cars and Ola Dash was the beginning of a cost-cutting exercise and the company is getting ready to further trim its workforce with an eye on profitability.