Bolt has given reasons why it would not increase fares in Nigeria by as high as 200% as drivers demand in response to the high cost of petrol, saying that may limit passengers’ ability to pay and impact the business.
The ride-hailing company said it was aware of the cost drivers faced since the Nigerian government scrapped fuel subsidy on May 29, pushing the price of petrol to N537 a litre, nearly 200% higher than before.
The startup said it approved a percentage increase – but not just as high as the drivers want.
“The interests of our driver community remain at the heart of our business. We are cognisant of the fact that the challenging macroeconomic conditions directly affect the cost of living for both drivers and passengers,” Bolt Nigeria country manager, Yahaya Mohammed, told Pluboard by mail.
“We also understand that the rising fuel prices impose additional financial pressure on drivers who rely on the Bolt app for their income.”
– Not enough
App-based drivers in Nigeria, including Bolt and Uber operators, have protested the rates they are allowed to charge customers since the Nigerian government ended the decades-long subsidy.
The drivers, under the group, Amalgamated Union of App-Based Transport Workers of Nigeria, demanded 200% increase in fares and 50% cut in commission charged by the companies.
The group said some firms only agreed to a 40% raise and insisted on a strike in early June. Bolt did not say how much increase it approved. Our review of the new rate drivers charge on specific routes like going to the airport in Abuja, showed it is approximately 50%.
“What we are saying is that this time around, we will not allow only the app companies to take the decision, they have to take our input also because we are the ones that face the problem on the road,” Ayoade Ibrahim, secretary of the union Pluboard at the time.
“Someone that stays in the office cannot just sit and fix a price for someone that is on the road every day.”
The group said on Wednesday it shelved the planned strike to allow talks with the Nigerian authorities.
– About business
Reacting to a Pluboard inquiry on how it planned to resolve the problem, Bolt said, “After listening to our drivers, we recently announced fare adjustments across all the cities where we operate. We empathise with the drivers and passengers on the economic hardships currently being faced and we will continue to consider the well-being of both parties.”
It said it recognized that a steep price raise will impact drivers’ earnings as many customers may not be able to pay, a potential loss for the company too.
“We adjusted our fares taking into account the issue of demand and supply. Excessively high prices will discourage passengers from ordering rides, thus negatively impacting drivers’ earnings. Therefore, our revised fares aim to strike a balance between better compensation for drivers and manageable prices for passengers,” the firm said.
– Africa plan
The Estonian ride-hailing company gets about 50 million of its 150 million customers from Africa, and plans expansion. It so far has launched in seven African countries, its Chief Executive Officer Markus Villig told Reuters in May.
“Out of all the African countries, we’ve so far only launched in seven… over the next 10 years Africa remains a massive opportunity for us,” Villig said.
The company, valued at over $8 billion in January last year, hopes to turn profitable in the next 12 months and be ready for an initial public offering in 2025, Villig said.
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