Ritesh Agarwal, founder and CEO of OYO
Fast-growing Indian start-up Oyo, which offers budget hotel rooms, is said to have built up its domestic business by employing questionable tactics that are casting doubts on the company’s health, the New York Times reported.
Oyo is able to bump up the number of listings on its website by including rooms from unavailable hotels, the Times said, citing chief executive Ritesh Agarwal as well as current and former employees.
Many of those rooms listed are from unlicensed hotels and guesthouses. To dodge problems that authorities might cause them over this practice, the start-up sometimes gives free accommodation to the police and other officials, according to the report.
The newspaper added that Oyo refused to pay hotels the full amounts of money they were allegedly owed, based on interviews with hotel owners and employees, emails, legal complaints, and other documents.
Agarwal founded the company in 2013 at age 19. Since then, Oyo has quickly grown across more than 80 markets and is scaling its business in the U.S. with converted properties in Dallas and Las Vegas.