In-car entertainment has always been an interesting proposition, especially with the introduction of self-driving cars. Companies have been working tirelessly to move the industry forward, and we may be seeing the beginning of an exciting change in automobiles. In late 2016, Indian ride-hailing service Ola announced the launch of “Ola Play,” an in-car entertainment platform that will not only spare riders the pain of yet another driver’s poor taste in music, but offer many options for diversion via their smartphones and custom-built interactive devices mounted in the vehicles.
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In the announcement, Ola revealed that Qualcomm will build hardware for the in-car device, that Indian automaker Mahindra & Mahindra will integrate the new platform into their vehicles that drive for Ola, and that they now have a strong slate of partners for the software and content, including Apple, Sony, and Fynd. CEO and co-founder Bhavish Aggarwal also shared that more partnerships are currently in the works.
This move rings similar to Uber’s partnerships with Spotify and Pandora that empowered riders to control the tunes for the ride, but Ola’s move strikes for something much larger. But first, we should talk a little about Ola itself.
Over the past few years, Ola has risen as a major player in the Asian ride-hailing industry and the dominant operator in the Indian market, but does not stand on solid ground. Since Uber is offloading its Chinese operations for a 20% stake in Didi Fuxing, it will be diverting its efforts to the next largest market for rides, which is India. Already, Uber is rolling out features designed for Indian riders, such as the ability to book a car without using the app.
On top of the renewed competition, relations will be complicated with Uber holding stake in one of Ola’s largest investors. Thus far, Ola has raised more than $1 billion from investors including Tiger Global, Sequoia Capital, SoftBank, and Didi, so it’s unclear how the finer parts of the competition will play out.
Ola Play was piloted in some of the larger markets, including Mumbai, Bangalore, and Delhi, but Aggarwal plots a trajectory to deploy the system to more than 50,000 cars by March, 2017. Originally, the platform was targeted primarily at business travelers, but the Ola leadership is planning to widen their scope with the expansion.
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In its current iteration, Ola Play stands to push the company higher and higher on top of the dogpile. The decision to invest in this initiative could not have come out of thin air; clearly the strategy was validated by market research. Indian commuters will likely increasingly choose Ola over Uber, given the significant bump in ride quality it’ll offer.
If Ola Builds It, Developers Will Come
As the platform draws more app developers and Ola collects usable data on how riders interact with the devices, the potential for monetization is huge. Ola could essentially create an entire app store of their own, controlling transactions and taking a 30% cut, just as Apple does with the iPhone. The huge ridership already offers powerful network effects to draw in more developers, so Ola would be foolish to not pursue a full-blown market for apps.
Riders could purchase apps from their phone or in-car, and their custom interface is pre-loaded into the car while the rider waits for the car to arrive. It’s unclear if India’s telecommunications infrastructure could support such frequent and likely data-heavy downloads, but that would be an incredible value-add for riders over what Uber currently offers.
As my co-author on Modern Monopolies, Nick Johnson, has previously written, this kind of platform is the future for autonomous vehicles. Just as with the smartphone wars, users won’t care significantly about the hardware – they’ll merely want a stellar experience, which is clearly what Ola is trying to offer. The fact that Ola Play syncs and offers control via riders’ smartphones is only the beginning. Eventually, the autonomous vehicle app store can offer as much of a paradigm shift in the auto industry as Apple and Google brought to cell phones.
While it’s unknown whether Ola has plans for self-driving cars, it’s partners for the platform certainly do. Apple can reap loads of user data through how riders use Apple Music and their iPhones in the car, which will assist them in their plans for an iCar. Additionally, even though the data will almost entirely be exclusive to Indian riders, the data will capture so many use cases that Apple will have serious strategic insights for the future of Project Titan, Apple’s plan for an electric car.
Ola Leads the Way Forward
The launch of Ola Play should send chills down the spines of auto executives across the world. This new platform is paving the way for the future of the in-car experience and none of the big movers have even made mention of this, save for the hints swirling around Apple’s initiatives.
Ola’s rollout is miles ahead of the other companies, such that they’ll be playing catch-up to Ola if they don’t launch some sort of pilot program soon. Tesla, for instance, already has semi-autonomous vehicles in consumer hands, so they could easily roll out a development platform to market with their established customer base.
On the other hand, Ola may be the winner in India, but it is essentially trapped. Uber has been encircling the region by launching in the bulk of South Asia, most recently in Bangladesh. This leaves the last big market for ride-hailing in Africa. Moving forward, Ola could be a premium target for acquisition or partnership in order to capitalize on the troves of user data it’ll be collecting once Ola Play launches. Automakers and tech giants alike should be taking note of Ola’s platform as it develops.
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