NEW DELHI
Oyo, a startup that offers budget hotel rooms, has grown into one of India’s most valuable private companies and aims to be the world’s largest hotel chain by 2023.
But at least part of Oyo’s rise in India was built on practices that raise questions about the health of its business, according to financial filings, court documents and interviews with 20 current and former employees, as well as others familiar with the startup’s operations. Many spoke on the condition of anonymity for fear of retaliation from the company.
Oyo offers rooms from unavailable hotels, such as those that have left its service, according to the company’s chief executive and nine of the current and former employees. That has the effect of inflating the number of rooms listed on Oyo’s site.
Thousands of the rooms are from unlicensed hotels and guesthouses, its executives have acknowledged. To deter trouble from authorities over the illegal rooms, Oyo sometimes gives free lodging to police and other officials, according to nine of the current and former employees and internal WhatsApp messages viewed by The New York Times.
Oyo has also imposed extra fees on hotels and declined to pay the hotels the full amounts they claimed they were owed, according to interviews with hotel owners and employees, emails, legal complaints and other documents viewed by The Times. Some hotel operators have sought to file criminal complaints against Oyo, which said it withheld payments primarily over the hotels’ customer service issues.
“It’s a bubble that will burst,” said Saurabh Mukhopadhyay, a former Oyo operations manager in northern India who left the company in September.
Oyo is part of a group of prominent startups that have sprinted to get as big as possible, fed by money from large investors such as Japanese conglomerate SoftBank. Now some of those young companies – from office rental company WeWork in New York to delivery service Instacart in San Francisco – have started showing cracks in their businesses.
Any fall by Oyo could blight India’s startup landscape, which has received billions in foreign capital in recent years, spawning other multibillion-dollar companies such as ride-hailing firm Ola and digital payments provider Paytm.
It would also be another black eye for SoftBank, which is Oyo’s biggest investor and owns half the startup’s stock. Masayoshi Son, SoftBank’s chief executive, has hailed Oyo as a jewel of his company’s $100 billion Vision Fund, even as he recently wrote off billions of dollars on other investments like WeWork.
“This is the only company which went global at this scale from India,” Satish Meena, a senior forecaster for research firm Forrester in New Delhi, said of Oyo. “But as of now, there are serious doubts about the business model.”
SoftBank declined to comment.
Ritesh Agarwal, Oyo’s chief executive, acknowledged in a recent interview that some of his company’s room listings included hotels that it no longer worked with. He said Oyo left those listings up and marked them as “sold out” as it tried to woo the hotels back.
Aditya Ghosh, Oyo’s head of India operations, also said in an interview that many hotels lacked required licenses, leaving them vulnerable to the occasional government raid. He denied that Oyo gave free rooms to officials.
Ghosh dismissed what he called “noise” from hotels about extra fees and nonpayment of bills. “The disagreement is about the penalties we charge on customer service failure,” he said.
He added that nearly 80 percent of Oyo’s employees had been at the company for less than a year, so training has been a challenge. “We have just grown very, very fast,” he said.
Founded in 2013 by Agarwal, then a 19-year-old student, Oyo set out to organize India’s budget hotels, which have traditionally been small, family-run enterprises. The company coaxes the hotels to become Oyo-branded destinations that list exclusively through its website; it then markets those rooms online to travelers and takes a cut of each stay. The startup also runs some hotels itself.
Oyo is trying to expand globally and now offers more than 1.2 million rooms in 80 countries, including the United States. It employs more than 20,000 people and has raised more than $2.5 billion in funding. Agarwal has become a business star, hobnobbing with India’s prime minister, Narendra Modi.
But as Oyo has grown, its losses have mushroomed. The company expects to lose money through at least 2021, according to recent government filings. Some efforts to expand in countries like Japan have flopped.
In December, SoftBank and Agarwal put another $1.5 billion into Oyo to accelerate its expansion. The funding, negotiated over the summer, valued the company at $8 billion.
At the same time, two other big investors, Sequoia Capital and Lightspeed Venture Partners, reduced their holdings. The venture capital firms, which both hold board seats at Oyo, sold $1.5 billion of their stock – about half their stakes – to Agarwal. He borrowed money to buy the shares and paid the venture firms a price that valued Oyo at $10 billion.
Lightspeed and Sequoia declined to comment.
The current and former workers said that Oyo was never an easy place to work but that pressure increased over the last year.
Mohammad Jahanzeb Gul, who joined the startup in January 2019 and supervised 23 Oyo properties, said that during the nine months he was there, he sometimes spent all day and night in front of a computer to meet deadlines.
“The culture is really very toxic,” he said.
Mukhopadhyay, who began working at Oyo in August 2018, said employees were under so much pressure to add new rooms that they brought hotels online that lacked air conditioning, water heaters or electricity. He and eight others said their managers had asked them to engage in a monthly shell game of briefly inserting these unavailable properties into Oyo’s listings – complete with fake photographs – to help impress investors.
Ghosh, who left the India job and joined Oyo’s board, said that some hotels open in stages and that “there is no padding.”
Saurabh Sharma, who worked for Oyo from 2014 to 2018 as an operations manager, said the company sometimes deliberately withheld payments from hotel owners – a practice that half a dozen other current and former employees also described.
Executives have also asked employees to paper over troubling incidents, some workers said.
Mukhopadhyay said that one night last June, a long-term guest at an Oyo-run property in Noida, near New Delhi, called him. She said three men had raped her in her room.
The next morning, Mukhopadhyay and another Oyo employee were summoned to the police station, where they pleaded with the guest not to register a formal complaint. Oyo’s legal team also instructed them not to tell anyone about the incident because it could hurt the company’s image, he said. The guest withdrew the complaint and moved out.
In a telephone interview, the guest confirmed Mukhopadhyay’s account. Oyo disputed some details and said any decision to file a complaint was up to the guest. Noida police said they had no record of a complaint.
Mukhopadhyay said Oyo’s growth practices contributed to his decision to leave.
“There’s something called integrity,” he said. “I can’t compromise on that.”
Myanmar Summary
ဈေးသက်သာသော ဟိုတယ်အခန်းများ ဝန်ဆောင်မှုပေးသည့် Oyo သည် အိန္ဒိယတွင် တန်ဖိုးအမြင့်ဆုံးသော ပုဂ္ဂလိကပိုင် ကုမ္ပဏီများထဲမှ တစ်ခုဖြစ်လာပြီး ၂၀၂၃ ခုနှစ်တွင် ကမ္ဘာ့အကြိးဆုံးသော ဟိုတယ်လုပ်ငန်းတွဲ ဖြစ်လာရန် ရည်မှန်းထားသည်။
သို့သော် အိန္ဒိယနိုင်ငံရှိ Oyo ၏ တိုးတက်လာမှုတစ်စိတ်တစ်ပိုင်းမှာ လုပ်ငန်း၏ အနေအထားနှင့် ပတ်သက်၍ မေးခွန်းထုတ်နေကြသော လုပ်ငန်းအအလေ့အထအပေါ် အခြေတည်ထားခြင်းဖြစ်ကြောင်း ဘဏ္ဍာရေးအစီခံ ချက်များ၊ တရားရုံး စာရွက်စာတမ်းများ၊ လက်ရှိ လုပ်ကိုင်နေဆဲ၊ ယခင်ကလုပ်ကိုင်ဖူးသော အလုပ်သမား ၂၀ ခန့်ကို မေးမြန်းထားသည့် အင်တာဗျူးများအရသိရသည်။ အများစုမှာ ကုမ္ပဏီဘက်က လက်တုန့်ပြန်လာမည်ကို စိုးရမ်သောကြောင့် အမည်ဖော်ပြခံလိုခြင်းမရှိကြပေ။
Oyo မှာ ဝန်ဆောင်မှုမပေးတော့သော ဟိုတယ်များကဲ့သို့သော အသုံးမပြုတော့သည့် ဟိုတယ်အခန်းများကို ဝန်ဆောင်မှုပေးကြောင့် ကုမ္ပဏီအကြီးအကဲ၏ ပြောဆိုချက်အရလည်းကောင်း၊ လက်ရှိနှင့် ယခင် အလုပ်သမားများ၏ ပြောဆိုချက်များအရလည်းကောင်း သိရသည်။ ထိုကဲ့သို့ ပြုလုပ်ခြင်းကြောင့် Oyo ၏ ဝက်ဆိုဒ်တွင် အခန်းများဖောင်းပွလာသည်။
အခန်းထောင်ပေါင်းများစွာမှာ လိုင်စင်မရှိသော ဟိုတယ်များ၊ တည်းခိုခိုးများမှ ဖြစ်သည်။ တရားမဝင်အခန်းများနှင့် ပတ်သက်၍ အာဏာပိုင်များနှင့် ပြဿနာမတက်စေရန်အတွက် Oyo သည် ရဲများ၊ အခြားသော တာဝန်ရှိသူများအား အခမဲ့ တည်းခိုခွင့်များပေးကြောင့် လက်ရှိ လုပ်ကိုင်နေဆဲ Oyo ဝန်ထမ်း၊ ယခင်က လုပ်ကိုင်ခဲ့ဖူးသော ဝန်ထမ်းဟောင်း စုစုပေါင်း ကိုးဦးထံမှလည်းကောင်း ကုမ္ပဏီတွင်း ပေးပို့သည့် WhatsApp မက်ဆေ့ဂျ်များအရလည်းကောင်း သိရသည်။
ထို့အပြင် Oyo အနေဖြင့် ဟိုတယ်များအပေါ် အပိုကြေးများ ထပ်ဆောင်းခဲ့ပြီး ၎င်းတို့ပေးရမည့် အခကြေးငွေများကိုလည်း ဟိုတယ်များကို ပေးရန် ငြင်းဆိုခဲ့သည်။ အချို့သော ဟိုတယ်လုပ်ငန်းများကတော့ Oyo ကုမ္ပဏီအပေါ် ရာဇဝတ်မှုနှင့် တရားစွဲရန် ကြိုးစားခဲ့သည်။
Oyo မှာ ဂျပန် လုပ်ငန်းစုကြီး SoftBank ကဲ့သို့သော ရင်းနှီးမြှုပ်နှံသည့် ကုမ္ပဏီကြီးများက ငွေကြေးများ ပုံအော်ထည့်သွင်းခြင်းကြောင့် ထိုးတက်လာသည့် ပေါ်ထွန်းစ လုပ်ငန်းကြီးများထဲမှ တစ်ခုဖြစ်သည်။ ယခုအခါတွင် အဆိုပါ ကုမ္ပဏီငယ်များမှာ လုပ်ငန်းတွင် အက်ကြောင်းများ ပြလာနေသည်။
Oyo ပြိုလဲမှုသည် အိန္ဒိယနိုင်ငံ၏ ပေါ်ထွန်းစ လုပ်ငန်းများ၏ အနေအထားကို ပြသနေသည်။ အဆိုပါ ကဏ္ဍမှာ ယခုအခါတွင် အမေရိကန်ဒေါ်လာ ဘီလီယံချီသော ပြည်ပ ရင်းနှီးမြှုပ်နှံမှုများ ရရှိနေသည်။
ထို့အပြင် Oyo ၏ အဓိက အကြီးဆုံး ရင်းနှီးမြှုပ်နှံသူလည်းဖြစ်၊ ကုမ္ပဏီ၏ ရှယ်ယာ ထက်ဝက်ခန့်ကိုလည်း ပိုင်သော SoftBank အတွက် ထိုးနှက်ချစ်တစ်ခုဖြစ်လာနိုင်သည်။
