Ola Electric’s co-founder Bhavish Aggarwal has just announced an ambitious plan to open as many as 3,200 stores by the end of December. These will be in addition to the current 800. Aggarwal has said the massive expansion plan is to reach electric two-wheelers (e2Ws) to every pincode in the country.
It’s ironical how these announcements are relayed by our media without a caveat or a question. Even the stock market swallowed it and moved up 6.6 percent soon after the announcement, in anticipation of a massive sales boost. Some of the pink papers which carry such ‘news’ must now do their due diligence and check how many Ola stores actually opened, and how they are performing.
Isn’t it cheeky a company facing thousands of complaints from Ola scooter buyers, and unable to provide maintenance services to its existing customers, wants to expand points of sales four-fold? Doesn’t the company first need to explain and apologize for its existing non-functional after-sales network?
The National Consumer Helpline, managed by the Department of Consumer Affairs, has registered 10,644 complaints against Ola e-scooters from September 1, 2023, to August 30, 2024. In recent months social media has been agog with pictures and videos of lines of junked Ola e2Ws outside showrooms and service stations. Several videos of frustrated consumers – one setting fire to an Ola store, another destroying his vehicle in front of a showroom – went viral.
But it took a stand-up comic to take on Bhavish Aggarwal on ‘X’ with these videos and complaints to force a public debate. The Fourth Estate prides itself of speaking Truth to Power; but it was only after lakhs of consumers pitched in to support Kunal Kamra, that the mainline media began reporting the skirmish.
And amidst falling sales and stock price, Ola co-founder Bhavish Aggarwal was hardly remorseful. Instead, he offered Kunal Kamra a job to come and help him solve Ola’s problems!
Poor performance
The market indicators are red-flagging Ola, but its founders continue to ride the froth. The company’s quarterly results indicate scooter sales declined 21 percent sequentially to 98,619 in the July-September period. This resulted in a 26 percent drop quarter-on-quarter in revenue at Rs 1,214 crore, while net loss widened 40 percent to Rs 495 crore. To stem the tide, the company has fired 400-500 personnel – about 10 percent of its 4,000-strong workforce.
In respect of sales, Ola Electric’s market share fell from a dominant 49.8 per cent in May to 31 per cent in October. It dropped further to 25.3 per cent in November - the lowest this year. Though still No. 1 in the EV scooter market, TVS and Bajaj Auto are closing in with 23.3 per cent and 22.6 per cent, respectively.
A company that claims it has solved 99.1 percent of the complaints, is not listening. There are major problems both with the product as well as the way the company deals with consumers. For instance, the flagship Ola S1 Pro uses a front fork arm from a Dutch model, but in India it crumbles on bad roads or even when hitting a minor bump. Ola scooters have also been plagued with software glitches and battery failures.
Key categories of complaints include charges imposed during free service periods or warranties, delayed and unsatisfactory service, refusal or delays in honouring warranty claims, recurring defects despite repairs, and performance inconsistencies with advertised claims.
Instead of consolidating its operations by reworking its existing products and building its maintenance network currently in shambles, Ola Electric has audaciously launched a new range of scooters including the Ola Gig and S1 Z series. The company is also preparing to launch its ‘Roadster’ motorcycle series. Shouldn’t the Department of Consumer Affairs lay down a ‘minimum performance’ playbook before allowing more consumers to suffer?
Slow redressal
The ‘Ola experience’ also highlights the poor level of consumer grievance redressal in India. By its own admission, the department of consumer affairs had received 10,644 online complaints in one year by 30 August, 2024. Yet it did nothing. It was only on 7 October that the Central Consumer Protection Authority (CCPA) woke up and gave notice to Ola for violations of consumer rights, misleading advertisements, and unfair trade practices; and only after there was a maelstrom triggered by Kunal Kamra’s tweets.
Thereafter too, the CCPA has been dragging its feet. A preliminary investigation has proven the Ola claim of having addressed 99.1 percent of the complaints is false. However, instead of bringing Ola and Bhavish Aggarwal to book, the CCPA has given a second notice to Ola Electric on 4 December seeking additional documents and information concerning the EV maker’s response of 22 October.
We know where this is headed. With the lapse of time, public interest in the dispute will slowly subside. Those directly hit by defective scooters or awaiting refunds will be frustrated and give up.
The CCPA was set up as a fast track ombudsman in July 2020 to resolve consumer grievances and to avoid lengthy litigation under the Consumer Protection Act. But the Ola experience shows we still have a long way to go. If the CCPA means business, it must impose heavy penalties on each of the pending cases. A punishment that pinches the pocket is the only deterrent.