Cab-hailing app Ola has suspended Foodpanda India’s food delivery business, according to a media report.
The move comes just 18 months after the ANI Technologies Pvt. Ltd-owned Ola acquired Foodpanda’s India unit for $40-50 million.
Ola has laid off about 40 mid- to entry-level employees and terminated contracts of most of its 1,500 food delivery executives, according to the report.
“In the last two weeks alone, the company (Ola) has dissolved the ground team completely. The core operations team consisting of senior employees is being retained,” said the report. “The entry-level employees were given intimation first, followed by the on-ground operations team.”
Most of the restaurants on the Foodpanda platform, when accessed through the Ola app, are now shown as “unavailable”.
Notably, Foodpanda’s cloud kitchen system and other in-house brands will continue to operate. But they won’t be accessible through the Ola app.
Currently, Foodpanda owns three private label brands under its cloud kitchen business, including Great Khichdi Experiment and FLRT.
The move comes as Ola is struggling to keep the business afloat amid stiff competition from Zomato, Swiggy and UberEats.
Foodpanda was Ola’s second unsuccessful attempt at the food delivery business. In 2016, Ola had shut down its food delivery business Ola Café, a year after launching it in Delhi, Mumbai, Bangalore and Hyderabad.
At the time of its acquisition by Ola, Foodpanda was offering deep discounts to attract customers. During its peak in August 2018, it clocked close to 200,000 orders daily, according to industry estimates. This number is now around 5,000. In contrast, Swiggy and Zomato each clock around 1.1 million orders daily, according to the media report.