Performance Incentives for Gig Workers, Employees, and Partners at Ola in India: How Does Compensation Structure Impact a Ride-Hailing Business?

Abstract

Ride-hailing company Ola is in a tough place. To scale up, Ola initially offered its drivers generous commissions and performance incentives. Now, under pressure from investors to turn a profit, compensation has shrunk, causing a cascade of negative impacts. How can Ola turn things around? Ola is a platform-based organization that offers on-demand mobility services via its proprietary app. After signing up drivers in sufficient numbers to achieve sizeable market presence, the company focused on profitability. It pursued a cost-saving strategy for generating profits, cutting costs mainly by lowering the incentives and margins offered to its drivers and business partners. This case study captures the impact of worker employment models and compensation structure on all the connected stakeholders. Students are invited to discuss additional business strategies Ola should pursue to become profitable, while also affording its drivers a livelihood.

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