Bolt's cheaper taxi fares hit drivers' pockets

A reduction in fares put in place earlier this month by ride-hailing platform Bolt has caused frustration among drivers, who say they are bearing the cost in reduced earnings, ETV news show "Aktuaalne kaamera" (AK) reported Thursday.

Some drivers say they are having to work up to 100 hours per week to maintain the same earnings as they took in before Bolt changed its tariffs, while the company says that fares were cut to boost demand, and that this in turn will benefit gig economy service providers using the platform.

The issue in part relates to the rationale behind Bolt from an employee's perspective. Those providing taxi services do so as small businesses, but they do not have as many legal protections in relation to, for instance, over-work, as do regular salaried employees.

AK reported that Bolt itself is not imposing limits on how many drivers can provide a service via the platform at the one time, leading to a glut in supply and pushing down earnings as a result.

Oscar Rõõm, head of Bolt's ride-sharing services, told AK about the rationale here. He said: "Our cars and drivers are then more readily available, because we have more drivers."

"We can offer a service more cheaply, leading in turn to rising demand, which improves earnings, and this in turn attracts more drivers and interested parties. This is how we see the cycle revolving," Rõõm went on.

AK spoke with a dozen Bolt drivers, picked at random. None of them were willing to appear on camera, citing fears of being barred access to the platform if they did.

One said: "There are many Ukrainians forced to work here, and you see many black drivers, while many of them are also from Asia," adding there are few Estonian Bolt taxi drivers.

Another explained the breakdown of earnings as he saw it. "If you make €1,000, then €250 of that goes to Bolt as a brokerage fee and €220 goes on taxes. So, you give away a total of €470. You're left with €530. Of that, €130 is spent on fuel, so how much do you have left? About €400."

The same driver said that this was around €700-800 less than what could previously be made in a month.

A third said: "Everything else is getting more expensive; only taxi fares are being reduced. There is no logic to it."

"Our earnings have significantly fallen. Not wages, but earnings. At least by 30 percent, if not more. Previously, there was a per-kilometer charge, plus a minute charge. Now, the per-minute charge has been removed," he continued.

While Bolt's commission had already been hiked, from 20 percent to 25 percent, at the same time as fares, minimum charge and initial fees had also been raised, "Nowadays, prices are being lowered, but the brokerage fee remains the same," he said.

"So, to sum up, the impact is considerable," the driver went on.

Oscar Rõõm at Bolt told AK: "If the number of drivers has been rising yet demand remains the same, then a larger pool of drivers are doing the same work, which means earnings fall."

"The only way to alter this is not by increasing prices, because then there would be even lower demand, but to actually boost demand," he added.

Most drivers AK spoke to said that no additional customers had been evident recently, meaning they simply have to work even more hours to have a chance of maintaining the same income as before.

Another driver "half-jokingly," put those hours at "somewhere around 300 hours a month or maybe 400 hours," this as the workload required to make a "basic" monthly income.

"There are drivers who essentially sleep in their cars," he added.

"To get €400 left over per week, you need to drive seven days a week, without any days off," another driver told AK.

Earlier this month, Bolt reduced fees to customers at a time when the number of Bolt drivers in the market in Tallinn and in Estonia rose "explosively," AK reported.

In fact it was this surge in driver supply as noted by Rõõm which led to the company cutting prices, to boost demand.

The AK report covered Bolt's taxi platform and service providers only, not the food courier, car rental or e-scooter rental segments of the business.


Peter Kinyua

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