Uber competitor Bolt raises prices 10 percent in London amidst driver shortage and regulatory changes that add to ride-hailing companies’ bottom line
Ride-hailing app Bolt has raised its prices in London by 10 percent, bringing them in line with those of rival Uber, amidst a shortage of drivers and regulatory tightening.
Uber raised its prices to the same level in November as drivers reduce their hours or switch to rivals such as food delivery services or Amazon.
In addition, a December ruling by the High Court that UK private hire taxi operators must enter into a contract with customers when they accept bookings, could add to ride-hailing firms’ overhead.
Such companies previously argued they were merely platforms connecting drivers and passengers, but the ruling means they must charge VAT as transport providers rather than agents.
But the ruling only applies to private hire companies in London and Bolt’s price rise also only applies in the capital.
A separate judgement last February that Uber drivers should be considered workers also adds to ride-hailing firms’ bottom line.
The decision was in part based on the argument that if a company sets the prices it charges, drivers should be considered employees.
In November Bolt began experimenting with allowing drivers to set their own rates in three UK cities, but the firm said it has “paused” the rollout while it reviews its operating model in the wake of the High Court decision.
Last week Bolt said it had raised 628 million euros (£524m) in a new funding round led by Sequoia Capital and Fidelity.
The round values the eight-year-old Estonia-based company at 7.4bn euros, up from 4.2bn euros in August.
Chief executive and co-founder Markus Villig wants to turn Bolt into a “super app” offering multiple servics, a business model popular in Asia.
The company, founded in 2013, has challenged Uber in key markets such as London and Paris while expanding into markets including online food and grocery deliveries and e-scooters.