How much e-scooter and driver-sharing does Berlin need?
Three weeks after unleashing its e-scooters on Berlin, Bolt is now brokering taxi rides. Some in the business see just "another parasite".
Berlin-Things are looking grim on the Berlin taxi market. Drivers are hurting from the the dearth of tourists, trade fair visitors and clubbers. And competition from Uber and Freenow is making life even more difficult for drivers. In the past year and a half alone, more than 500 taxi operators in Berlin have thrown in the towel and surrendered their licences for a total of about 1,400 taxis. And now there is new competition.
Bolt, from Estonia, began renting cut-rate e-scooters in Berlin in mid-May and is now entering the taxi space. From Wednesday, 9 June, vehicles can be booked via an app for rides throughout the Berlin city area. Uber made in Estonia.
"Our goal is to make urban transport easier, faster and more reliable for everyone in the world," says Bolt CEO and founder Markus Villig, who sees himself as a pioneer for the transformation of mobility. Bolt believes private cars have no future in cities. On the contrary: "We create incentives to leave your own car behind," says the 27-year-old.
Villig founded Bolt in Tallinn in 2013 under the name Taxify, after dropping out of university a semsester into his computer studies course. These days, Bolt claims to be the leading mobility platform in Europe and says it has more than 50 million users in over 40 countries in Europe and Africa. Since 2018, Daimler has held a stake in the firm, which has long been valued at more than $1bn.
Bolt wants to dominate the German taxi sector. As with Uber, Bolt's fares are based on the distance and duration of trips. However - and this is the difference to old-school taxis - the price can vary depending on supply and demand. In any case, the guaranteed fare is displayed in the app before the booking is completed. Bolt asserts that it only works with licensed car rental and cab companies and with drivers who have a valid passenger transport licence. Bolt says it only acts as an intermediary between drivers and passengers. And it's already promising the best prices on the market.
We'll be fair to drivers
The lean business model makes it possible to offer the lowest prices, explains Bolt Germany boss Laurent Koerge. He says the company is committed both to profitability and fairness towards the drivers, who pay a commission of "only" 15 per cent, 50 per cent less than the competition. "Our goal is not only to offer them higher income per trip, but also to ensure high demand due to competitive prices, and thereby guarantee them a higher income overall," says Koerge.
One of the bigger players in the Uber business is Thomas Mohnke. The 63-year-old has about 250 drivers under contract in Berlin alone. He won's say what commission he pays - business secret - but "at most 25 per cent". The fact that Bolt is now charging less could certainly change the market, he believes. Nevertheless, he doesn't fear the competition. "There are about 800 players in this field worldwide. It was only a matter of time before the next one would come to Berlin," says Mohnke.
However, he does not expect more chauffeur-driven rental cars on the streets of Berlin. He assumes that many drivers who already drive for Uber and Freenow will soon also be on the road for Bolt.
This is also how Bolt sees it: "Bolt does not increase the number of cars or drivers in the city, but works with the current market supply". This means cooperation with licensed fleet operators. Bolt was unable to say how many drivers or companies had been signed up for their Berlin launch.
The number of car hire concessions in Berlin has grown by almost 600 to 4,562 since the beginning of last year, according to the city transport department. It also pointed out that the operation of a pure internet platform for the mediation of authorised forms of transport has so far been neither prohibited nor subject to authorisation.
"Another parasite"
Leszek Nadolski is not at all pleased with the new competitor. For the head of the local taxi guild, Bolt is just "another parasite" trying to infiltrate the Berlin taxi market. "They only come to Berlin because the authorities here are not in a position to ensure that the laws are enforced," says Nadolski. The taxi driver is concerned that Uber and Freenow drivers won't comply with the rule that they have to return to the company's headquarters when a job has been completed. Unlike taxis, they are also not allowed to wait on the street for passengers.
Taxi drivers are "basic providers for the population", says Nadolski. They have to accept every trip and have fixed rates. The others, on the other hand, only play taxi and can choose the most lucratives jobs. "The elderly lady who wants to go to the doctor will soon not be able to find someone to drive her," warns Nadolski.
In the four-year Berlin Local Transport Plan, valid through 2023, the state of Berlin has clearly committed itself to maintaining and supporting the taxi industry as a public mobility provider. But Nadolski has almost given up hope. Last month he earned a mere €1,800 with his taxi, with fixed costs of around €1,000. He refuses to switch to Uber or other immitators: "I won't enslave myself.