Current and former workers say Oyo's growth in India is fueled by questionable practices like imposing hidden fees, padding listings, and withholding payments
The allegations land at the end of a two-year arc of breakneck expansion: Oyo raised an $800M round led by SoftBank's Vision Fund at a $5B valuation, then pushed past India into China, where it now holds more rooms than at home while its US rollout stays bumpy. Filings show the machine behind that room count was burning cash — a $332M net loss on $900M revenue through March 2019, with China alone accounting for roughly 40% of worldwide losses.
What changed is the account of how the growth was produced: current and former workers tell the New York Times it leaned on hidden fees charged to partners, padded listings, and withheld payments. A week later, Bloomberg reported Oyo cutting 1,800 staff — 12% of its India workforce — making the quality-of-growth question impossible to separate from the cost-cutting one.
First-order effects
Oyo's hotel partners in India face direct financial exposure from hidden fees and withheld payments, while travelers booking padded listings may get rooms that don't match what was sold.
SoftBank's flagship portfolio company now carries a public integrity problem on top of its losses, just as it begins laying off thousands across India and China.
Second-order effects
Retaining existing hotel partners becomes harder precisely when Oyo needs their loyalty during retrenchment — partners burned by fee practices have less reason to stay through the cuts.
The reporting puts scrutiny on the wider SoftBank-backed playbook in India, where other portfolio companies' treatment of workers and partners will be measured against the same standard.
Third-order effects
If worker-sourced exposés keep landing on Indian platform companies — as they also did with Urban Company's steep targets pushing women out of gig work — partner and worker treatment becomes a durable diligence item for investors pricing India's consumer-tech sector.
The pattern points toward a structural correction in blitzscaled hospitality: growth measured in rooms signed rather than rooms honestly operated proving costly once funding tightens and partners can walk.
The trend: SoftBank-era blitzscaling in India is meeting its reckoning phase, where worker and partner accounts of how growth was manufactured surface exactly when the funding that sustained it slows.
WOW. First WeWork & Uber, and now this massive shitshow at Oyo. Does SoftBank have investments in any companies that *aren't* a hot mess? https://www.nytimes.com/...
@nytimes Even while Oyo claims to be more successful than ever, Oyo's front-line employees in India say their jobs are pressure cookers, with the company expecting them to be available 24/7. The company fired hundreds of people this year, claiming poor performance. https://www.ny…
Quite a story! Oyo offers rooms from unavailable hotels, such as those that have left its service, according to its CEO. To deter trouble from the authorities over the illegal rooms, Oyo sometimes gives free lodging to the police and other officials. https://www.nytimes.com/...
Much harder to scale businesses that touch the real world than purely online businesses. Sequoia - who is very good - sold $1.5b of stock last year. Have they ever sold so much while a portfolio co. was still private? I still wouldn't count Masa out though. https://twitter.com/..…
This damning story in Oyo was bound to happen, staring in everyone's faces for months and few years now, but took a global outlet with heft such as NYT to burst it on global stage, Indian media & trades have been writing bits of this for a while now: https://www.nytimes.com/...
“This is the only company which went global at this scale from India,” a senior forecaster for the research firm Forrester said of Oyo. “But as of now, there are serious doubts about the business model.” https://www.nytimes.com/...
@nytimes For our investigation into Oyo's practices, @Karan_Singhs and I interviewed 20 current and former employees and more than 20 others familiar with Oyo. We also spoke to 4 top executives to understand the company's perspective. Read the @nytimes findings: https://www.nytim…
“It's a bubble that will burst,” said one former employee of Oyo, an Indian hotel chain that now wants to be a big player in the U.S. and Europe. The start-up engaged in dubious practices to boost its growth, current and former employees said. https://www.nytimes.com/... via @NYT…
Backed by SoftBank, Oyo became India's largest hotel chain. But much of its growth was built on dodgy practices, like giving free rooms to the police and listing unavailable rooms, current and ex-workers said. A thread on the @nytimes investigation. https://www.nytimes.com/...
Excellent story this morning by @vindugoel and @Karan_Singhs for the @nytimes about Oyo. How can this business claim to be snapping at the heels of Marriott and IHG when it does not have something as basic as a reservation system in place. 👇 https://www.nytimes.com/...
Oyo now owns the Hooters hotel in Las Vegas and wants to transform America's budget hotel business the way it did in India. But what happened in India offers a cautionary tale. https://www.nytimes.com/...
The workers we spoke with say that accounts of Oyo's workplace suggest the company is stumbling. Any fall could blight India's start-up landscape. “This is the only company which went global at this scale from India,” said a forecaster in New Delhi. https://www.nytimes.com/...
NEW: SoftBank poured billions into Oyo, an Indian startup that dreams of becoming the world's biggest hotel chain. But its fast growth was built on questionable practices. A thread on our latest @nytimes investigation: https://www.nytimes.com/...
“To deter trouble from the authorities over the illegal rooms, Oyo sometimes gives free lodging to the police and other officials.” https://www.nytimes.com/...