- Taxify, a major European Uber rival backed by Daimler and China’s Didi Chuxing, has relaunched in London after being kicked out of the city two years ago over licensing issues.
- The $1 billion company has rebranded to Bolt and will offer on-demand rides to passengers in London, initially at cheaper prices than Uber.
- The London relaunch comes after the tepid floats for rivals Uber and Lyft. Bolt’s CEO and founder Markus Villig said his firm has had profitable quarters, in part because it has focused on not burning money.
- Villig said investors were interested in ride-hailing companies that demonstrated sustainable growth rather than growth at any cost.
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This was the Estonian ride-hailing startup that built up market share by focusing markets where Uber didn’t have much of a presence, namely eastern Europe and Africa.
It then expanded to London in a blaze of glory in 2017, vowing to break Uber’s monopoly. The startup immediately fell afoul of the UK capital’s strict licensing laws and had to pull its service just four days after launching.
Almost two years after this unceremonious exit, Taxify has cleaned up its act, won back its London operator’s licence, and relaunched in London as Bolt.
The deal for Londoners will be similar to Uber: open up the Bolt app, add your card details, and then summon a cab to take you from A to B. The company is promising that it’s rides will be up to 15% cheaper than the competition (read: Uber), and that it will initially charge 7.5% commission on fares. Bolt also offers scooter rides elsewhere in Europe, but since electric scooters remain illegal in the UK that won’t be on offer in London.
A spokesman for London’s transport regulator Transport for London confirmed to Business Insider that Bolt had been granted a 15-month licence. The spokesman said: “Bolt has been granted a London private hire operator’s licence after meeting all the necessary requirements.”
Bolt’s 25-year-old CEO and founder Markus Villig said the company had learnt “many” lessons from falling foul of the regulator two years ago.
“The part that we were hoping for and were frustrated by – Uber has this huge monopoly in London, it being one of the most profitable and biggest markets in the world,” he told Business Insider.
“On the one hand that was really harming consumers and drivers but on the other hand it means it’s also massive opportunity for us to enter. It’s been a nervous time for the last one or two years… it’s been a bit more stressful than other launches. But we learned, we’ve grown quite a bit as a company.”
Villig said it had become considerably harder to win an operator’s licence in London, and that Bolt had to demonstrate it could run a 24/7 emergency call service for passengers and that it had properly vetted its thousands of drivers in order to appease Transport for London.
Bolt says it has ‘profitable quarters’ as loss-making rivals Uber and Lyft held tepid IPOs
Bolt’s London relaunch comes amid a wider reckoning for the neo-transportation sector.
Uber and Lyft remain vastly unprofitable and held tepid IPOs earlier in 2019. Scooter startups also remain unprofitable. Why is Bolt going to be different?
For one thing, Villig says, the company has occasionally been profitable despite being absent from the US market and, for the last two years, London. That’s because the company has pursued a fundamentally different strategy, he said.
“The worry about these companies is whether they can be profitable,” Villig said, referring to Uber and Lyft. “We’re one of the few, maybe the only one, that has demonstrated a few profitable quarters in the last years.
“Coming from Estonia, it was always about being as frugal as possible and focusing more on low costs and automation. When we look at how much money we’re burning relative to gross bookings or amount of rides, we’re burning substantially less than Lyft or Uber.”
Bolt is still a private company and its finances are not publicly available for us to verify this.
The firm says it has 25 million customers across 30 countries. For context, local peer MyTaxi says it has 10 million riders, while Uber says it has 91 million monthly active users across all its services.
Villig said that unlike its rivals, Bolt hasn’t tried to grow rapidly and maintain a monopoly in every market. Rather it has focused on the markets where rivals had little to no presence and then grow sustainably from there. Having China’s dominant ride-hailing firm, Didi Chuxing, as investor and advisor doubtless helped.
Villig added: “The IPOs benefited us because investors are looking at the bottom line, and not just ‘How fast can we grow?’ but also ‘Is it a sustainable model?'”