29/01/2015 1:15 PM IST | Updated 15/07/2016 8:24 AM IST

Ola To Buy TaxiForSure, Reports Say

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Ola Cabs is in talks to buy TaxiForSure, news reports say, putting the sale price at between $200 million to $450 million in a mix of cash and equity.

The move is not surprising, given San Francisco-based Uber's rapid growth in India before its operations were halted by the government after a woman passenger was allegedly raped by one of its drivers in Delhi.

There has been no confirmation from either company. Mumbai-based Ola Cabs has been cofounded by Bhavish Aggarwal and fellow IIT-ian Ankit Bhati, and operates in multiple cities in India.

For Bangalore-based TaxiForSure, this would be a good time to exit. It would have found it difficult to compete with Ola Cabs, which raised $210 million from Softbank -- way more than the $30 million raised by TaxiForSure two months ago from Accel and Qualcomm. TaxiForSure is founded by Raghunandan G and Aprameya Radhakrishna, both graduates of IIM-Ahmedabad.

And competing with Uber, one of the world's hottest startups valued at $40 billion, is a huge challenge for both companies. The combined entity will be in a stronger position to take on Uber, once the ban on its operations is lifted. All three companies are facing bans in Delhi, unless they can get a radio cab licence that effectively means ditching their existing business model and transforming themselves, which is a tall order.

Ola, like Uber, provides a technological platform to connect drivers with customers. TaxiForSure has a similar model, but deals with cab agencies instead of individual drivers.

All cab aggregators, which refers to companies that use a technological platform to get you cabs on demand, are under scrutiny of Indian state and federal governments, and have been asked to fulfil a long list of conditions in order to transform themselves into radio cab operators and get a licence. Uber, Ola and TaxiForSure companies have submitted applications to get a licence, after the Delhi government impounded cars since the new rules came into effect in December 2014. Latest reports say that their applications have discrepancies and that it can take much longer for them to acquire one.