OYO furloughs thousands of employees as revenue drops by over 50% | Hacker News Reader

OYO furloughs thousands of employees as revenue drops by over 50%

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An ex-customer here. I had two worse experiences by booking on Oyo.

I got stranded along with my family in the middle of Bangalore city only because I made a payment through the Oyo app and the hotel rejected check-in.

I called the Oyo customer care, talked to 4 different staff for 2 hours, nobody takes the responsibility, neither want to resolve the problem. They finally told me to find some other room myself, refunded my money, and left like nothing has happened ever.

Begged to the hotel owner, got a room for that day, and then booked another room on MakeMyTrip for the remaining two days. The hotel owner said that NO hotels in Bangalore will accept bookings from Oyo, and this has already been communicated with Oyo, but Oyo still accepts bookings and payments.

Oyo replaces the website/phone info of hotels on Google Maps with the Oyo website and number, and this makes hard to contact a hotel directly. So I always collect hotel card/number whenever I visit a hotel.

Uninstalled the Oyo app instantly. Never used Oyo since then.

Ensured that none of my colleagues, friends, and relatives are going to use Oyo again and get cheated.

What has happened is , a good idea which is supposed to manage both demand and supply issue was what helped Oyo grow, i am assuming they worked very hard with local Indian hotels ignored by bigger international sites. However like many other startups they grew too big too fast and the pressure to justify their insane valuation probably led to all kind of tricks as long as they can get away with it.

Is it legal to replace Hotel info with Oyo no ? I am assuming they do it because a lot of small hotels do not know or understand the significance and Oyo can probably do it at scale.

They replace the numbers on Google Maps first - either by adding the hotel for the first time on Maps or by "claim this business" option. Everyone else collects the data from Google Maps (or their services) and now on every website, the hotel has Oyo's number.

Man, this is infuriating. What does Google say when the hotels call to correct the information?

I don't think hotels can do this, either the hotels don't know how to claim the business back, or this is a part of their agreement.

> a good idea which is supposed to manage both demand and supply issue was what helped Oyo grow

What was the good idea? As far as I can see, it was a ploy to try and get into the hotel business without the hard stuff, like capital expenditures, training employees, checking quality of hotels, etc.

> ..training employees, checking quality of hotels, etc.

This was the good idea. Lot of hotels everywhere and especially in developing countries in non-metro areas are owner managed, who may not be always at the cutting edge of hospitality industry's best practices.

For a 30% share of revenue if a startup can provide the above service at a scale and across different towns, make these small hotels discoverable and manageable online; then it is a GEEAT idea.

There is no way anyone can do that and produce the returns demanded by SoftBank, so from the beginning Oyo was a farce. Not to mention how ridiculous it is to think a 20 year old with no experience was going to create in a matter of years the work culture and organization and best practices and supply chains that took decades to build for the established brands.

And the established brands do it for, at most, a 15% share of revenue. The Oyo hotels I saw wouldn’t even be qualified to be proper hotels simply based on their build quality.

Yes to all of above (SoftBank, poorly executed, etc.)

But as an idea it is still a great one.

Someone else can come along and can make a success of it in some smaller or in a different way.

Speaking as a customer of oyo in India I've had terrible experience with them including a lot of my friends. I've not heard a single good thing from someone who has actually used their services so I really don't understand how they have become such a massively successful billion dollar company.

I mean everyone posts amazing pics of their property compared to how it actually looks but oyo was just an outright scam for me. It was as if someone posted all together unrelated photos of something else. It was so bad that I couldn't even locate the darn hotel after passing it like 5 times.

But then the same happened recently with my Airbnb booking too so I guess it has sort of become a norm here. The scene is kinda bad for these hospitality startups in India from the customer's point of view.

I think in India normal hotels work well, and the price difference between hotels and oyo doesn't justify the risk present with Oyo. I have started using MakeMyTrip and hotels for all my stays.

They have not become a successful billion dollar company.

Some kid with a story got a few dollars from SoftBank to become Marriott/Hilton/IHG except without paying for all the quality inspectors to go around and continuously make sure hotels are up to par.

Clearly, this business doesn’t scale and SoftBank was hoping to pawn it off on someone before it folded, like their other ventures.

> so I really don't understand how they have become such a massively successful billion dollar company.

Bullshit and Newspaper advertorials can go a long way in getting funding and then grabbing market.

Just listening to Jim Chanos on his views on gig economy (https://www.youtube.com/watch?v=StybwIP8O8k). One point he makes is that companies pay a lot more on top of salaries towards unemployment pool etc that gig economy companies don't. He basically said that this entire gig economy is fraud based on transferring all these burden to tax payers unlike normal companies who have normal employees.

FWIW generally exploiting the government is a source of value for a lot of companies. I wouldn’t limit this to just gig economy start-ups (although it’s a fascinating case).

Take Wal-mart, whose employees are paid so low and have so few benefits they may require government assistance from housing, food, to healthcare. [1]

Additionally season businesses like construction and landscaping business dynamics are essentially built on government subsidies. Every summer they hire hourly workers during peak building season and then in the winter lay them off so they can cut costs during the less busy season. Since the employees get laid off, they collect unemployment. [2]

[1] https://www.forbes.com/sites/clareoconnor/2014/04/15/report-...

[2] https://www.zenefits.com/workest/firing-vs-layoff-know-the-d...

The entire gig economy is finding legal (and in the case of Uber they didn’t even bother with that) ways to evade regulations.

Or Airbnb. Or Doordash

The contractors that drive for Uber, etc, don't qualify for unemployment benefits so the reduced burden on UI should even out with the reduced contributions, no?

In the US maybe, gig economy is global though.

Why does cheap lodging need to be subsidied by VCs? I didn't realize OYO was such a big company, but I've booked some rooms through them and it seems like it's just another booking source like booking.com or tripadvisor. The hotels had different names in person than on OYO and the only OYO thing about them was their shampoo bottles.

They're trying to become a sole-source supplier of hotel rooms. Same with WeWork, and Airbnb.

The middleman, taking a cut of every sale, while shifting all the risks to the consumer and the hotelier. Great gig if you can get it.

This is a good read: Oyo Ruined My Anniversary: https://oyo-ruined-my-anniversary.com/

#offmychest I detest Ritesh Agarwal and his poorly run startup. They have absolutely no culture, a friend who was working for their Bangalore sales team told me it was a dog-eat-dog world amidst them and clearly they're a good example of what not to do after you receive so much funding(lease properties in vegas lmao instead of fixing your app and doing better due diligence for the hotel listings so that some form of quality control can be expected, they just put a big sign in front of some run-down disgusting motel which says OYO), rose too quickly and now they have to resort to all sorts of tomfoolery to justify Masayoshi to stay sustainable. I have no idea how they'll ride the post corona wave when travel and hospitality have been the most hit sectors. I pray for you man ritesh goodluck.

I cannot understand OYO. At least in London, it is nearly all horrendous 2* hotels which were often used for temporary emergency housing, rebranded with an OYO logo but no significant refurbishment done. The reviews are absolutely atrocious and I feel sorry for a tourist that books into them. It would be a terrible impression of the city if you were a visitor.

Understand it from the point of the VC. They were trying to sell a story about a “visionary” who could create a hotel brand without paying for the people and infrastructure that make it all work. It takes time and money to build and do quality control for quality hotels. That doesn’t make for 1000x ROI though.

Easy to understand when you know they were never interested in selling quality hotel room nights, but rather trying to cash out on the equity.

I stayed in pretty decent hotels in Paris, when I was younger and couldn't quite afford the niceties that come with age and affluence.

You can run a decent, clean shop with nice personal service irrespective of the star rating.

Anything I hear (and see, i.e. in Malaysia) about OYO, though, is pretty horrendous.

Looks like the nails in its coffin are going in. Sorry, Softbank.

Shareholder lawsuit vs Softbank when?

You can't sue a company just because they made bad investments.

Had three next level terrible experiences with Oyo in India. Never using them again for hotels

Why are any articles on "bad news" being systematically removed from the HN front page?

Whether OYO would have done well, absent Covid-19, is a debatable point, but in general companies who were expanding rapidly with a lot of borrowing, right before a recession starts, do not do well.

Things like OYO and WeWork seem like they'll be particularly badly affected by this downturn as they've got a lot of fixed costs (leases or property owned) and their main markets will be heavily impacted.

Oh ye forgot about WeWork. I guess JIT office space is not a very good business when people are supposed to work from home?

https://news.ycombinator.com/item?id=22802790

https://news.ycombinator.com/item?id=22820255

>The startup’s teams in the U.S. are most impacted by the furloughs, according to a person familiar with the matter. In a statement, Oyo confirmed the furloughs and added that India, its home market, was not impacted

This is something Is m seeing more and more in the current climate. International companies ar elooking to cut payroll to reduce expenses, and ofcourse they are going tos tart with the country with the most out of proportion salaries.

Tack on the current insane unemployment benefit package and I'm wondering why companies aren't forloughing every person they even think they might not need.

It really sucks to be in the hospitality industry right now.

https://archive.is/THGGg

Anyone in the know of what is the impact on the OYO workforce here in India, which I guess is it's biggest market and where majority of it's workforce operates?

It is right there in the second para..

In a statement, Oyo confirmed the furloughs and added that India, its home market, was not impacted.

In India it's difficult if not impossible to let employees go. The Indian public will not forgive any company that fires people during this pandemic.

Capitalism and Morale does not go hand in hand.

This site breaks the back button.

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