For three years, U.S. startup Uber and its Ukrainian counterpart Uklon ruled the local taxi industry with their mobile apps. But recently a strong challenger has appeared: Estonian startup Bolt.
In fact, it has re-appeared.
Bolt worked in Ukraine in 2016 under a different brand name: Taxify. But it couldn’t withstand the competition and left the market. Two years later, it returned as Bolt after attracting $175 million in investment. Today, the company is valued at $1 billion, offers lower prices, and has managed to gain a share of the market.
Bolt still has a long way to go. It trails behind Uber and Uklon in terms of the number of rides. But some Ukrainians – both drivers and clients – are already used to having three taxi apps on their smartphones.
The drivers use all three to maximize the number of their clients, while the clients go for the service with the better deal.
“These are clear signs of healthy competition,” Pavel Karagjaur, the vice president at Bolt responsible for the company’s expansion, told the Kyiv Post.
Spreading fast
According to Karagjaur, Bolt is adding “thousands of new Ukrainian users every day.” However, he declined to disclose the total number of users in Ukraine.
Globally, the startup has 25 million users across 30 countries and boasted revenues of $18 million in 2017. All the money, however, is being reinvested into growth. In Ukraine, for example, the startup plows the money it earns into rollouts in new cities. As a result, it is not yet profitable.
The rollouts are ongoing. On April 25, Bolt launched in Odesa, adding the city to its current locations of Kharkiv, Kyiv, and Lviv. Dnipro and Zaporizhia are next, along with numerous small cities where its competitors are not yet operating.
“We can get profitable if we choose to,” Karagjaur adds. “But now we want to grow.”
Taxi service Bolt cars are parked in central Kyiv. Today the service works in Odesa, Kharkiv, Kyiv, and Lviv. (Vladimir Bugaenko)
It’s a bargain
Bolt’s main plus is a better price for users and more pay for drivers, according to Karagjaur.
“Drivers want to earn money. Clients want to save money while getting from A to B. So we make sure we’re good at these things,” he says. “And even if our app isn’t as good, we’re still doing well, because our value proposition is better.”
Making the price as low as possible is “totally fair” competition — there’s no reason to talk about dumping, Karagjaur says. “As long as it’s good for the end consumer, then it’s good for the market.”
The Estonian claims that rival Uber takes 25–30 percent of trip fare. Bolt, on the other hand, takes just 15–20 percent and distributes the difference between drivers and clients.
Another thing that helps save money is that the company bases its development offices in less expensive countries like Ukraine, Estonia, and Romania.
“We do hire great people and we don’t compromise with salaries, but these markets have a cheaper labor force than San Francisco, for example.”
The Estonian startup employs 30 people in the Ukrainian capital Kyiv, but is looking to increase this to 100 by 2020 – it needs more local staff to run a research and development center here. The center will work on maps and custom support for some of the European and African countries where Bolt operates.
By opening an R&D center here, it will be easier for the company to hire skilled tech specialists. “Some great engineers have families in Ukraine, and they don’t want to relocate to Estonia,” Karagjaur said.
Taras Potichniy, country manager of Bolt in Ukraine (L), and company’s vice president Pavel Karagjaur talk with the Kyiv Post on March 28, 2019. (Volodymyr Petrov)
Uber lookalike
The Bolt app, which is available for devices that run on the iOS and Android operating systems, looks similar to the well-known Uber app: a city map with cars on it and a button to summon one.
“The applications solve a similar issue and so they do resemble each other,” Karagjaur says, rejecting the notion of plagiarism. “We wouldn’t want – just for the sake of not being similar – not to do something that’s really good for the user.”
Bolt also wants to start competing with Uber in yet another area: food delivery.
The company is preparing to launch such a service in Estonia, Finland, and South Africa. If it works out well, Bolt will roll out its food delivery service in Ukraine in the summer of 2019.
“With a delivery service, you don’t need to have a car, a driver’s license, and experience. Anyone can be a courier and have a nice temporary income source like this,” Karagjaur said.
Here, it will rival Uber and Glovo, both of which started their delivery services in Ukraine at the end of 2018. But Karagjaur says that Bolt might decide to launch its service in other cities rather than Kyiv, which is already occupied by the competitors.
Naming
The name Bolt is new for the company — it only switched from being called Taxify in February 2019. “It signifies the future, which is electric, and speed, which is one of our core values,” he said.
Unfortunately, in Ukraine, the word “bolt” is also a slang word for the male reproductive organ.
“Yeah, that’s the only thing,” Karagjaur admits. “But we have only a few (Russian-speaking) markets to make an exception. Plus, we think that it’s not so vulgar.”
“If our service is really bad, then it will be bad,” he goes on. “But if our service is good, we will actually break through that stigma.”
The Kyiv Post’s technology coverage is sponsored by Ciklum and NIX Solutions. The content is independent of the donors.
