Friday, August 12, 2022

Ola EV two-wheelers and the online booking game: Be careful, very very careful

Ola’s battery operated electric vehicle two-wheeler announcement as well as online booking for 499/- has generated a massive buzz without any production or manufacturing facility up and running as yet. A closer look at the fine print in their terms and conditions reveals that there are a number of very open issues which increasingly begin to sound like the Nikola Electric Vehicle episode.

The terms and conditions of the Ola EV booking itself, when you reach the point where you have to place Rs 499/- down, sound ominous itself. A bit like paying for a movie ticket coming up in the future for which as of now nothing is known.

But why zero in on Ola alone? The complete automobile industry appears to have moved into this “online booking” game with an enthusiasm not seen since the days of airlines folding up selling tickets for routes that they had already withdrawn from. Or, better still, the large number of teak plantations and similar promises made of future benefits for fairly large sums of money. 

One interesting point here is that whilst the online booking is solicited by the manufacturer, the liability for everything else devolves on to the dealer – and the manufacturer does not take liability for dealers who may not deliver for whatever reason – including dealerships that stand cancelled or have gone bottom up. This is a huge risk in this day and age when dealerships are folding up like paper airplanes.

The advance booking amount demanded by automobile manufacturers for mass production vehicles varies from about 1% through to about 5% of the ex-showroom price. This is even if the vehicle is readily available ex-stock. The charade of advance booking appears to have just one reason  –  to “lock” a prospective customer into a one-sided deal where all sorts of extra costs and conditions are then sought to be loaded on to the customer. 

Consider these, which I have gone through in the last few weeks with three of the largest manufacturers and their dealers after online booking. All these bookings, by the way, were for vehicles to be purchased without taking any finance deals.

# A demand that I must open a bank account in a nominated local bank and branch

# Deliver copies of property documents

# Pay for “optional extras” including over-priced religious symbols to be fixed on the vehicle

# Pay for “registration charges” by an “agent” over and above the taxes due – when all such documentation is now online over the eVahan website

# Provide highly personal and financial information, over telephone, to persons calling on personal mobile phones, claiming to be from the manufacturer

# Providing wrong VIN numbers for “new” vehicles which were actually ex-factory over 4 months stale

# Refusing pre-delivery and pre-registration inspection of nominated specific vehicles

# Demanding and taking blanket approvals for documentation on blank forms

There appears to be a race to the bottom on this business of online booking of automobiles of all sorts which badly needs some regulation of the RERA sort. The Terms and Conditions set out are long and verbose, with the devil in the detail, often revealed only AFTER making the advance booking. On one side, the Ministry of Road, Transport and Highways have made matters much easier than before with online citizen’s services for pretty much everything including registration, transfer and driving licences. On the other hand, manufacturers and dealers have made their “advance booking” terms and conditions into a game where the customer is the loser at all points.

Back to the Ola electric scooter then. 499/- rupees sounds like a small amount for many people, but it is a very smart way to build up a database of people who may want to buy a battery two-wheeler – and then tweak the product accordingly. The debate on whether this will be a product for the urban market or the rural market, for example, is just one parameter that will emerge from the bookings. The last condition imposed on you, dear consumer, is the strangest – take a look at 11.4?

Veeresh Malik was a seafarer. And a lot more besides. A decade in facial biometrics, which took him into the world of finance, gaming, preventive defence and money laundering before the subliminal mind management technology blew his brains out. His romance with the media endures since 1994, duly responded by Outlook, among others.

A survivor of two brain-strokes, triggered by a ship explosion in the 70s, Veeresh moved beyond fear decades ago.

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