Most people will tell you that ride hailing will not work in Zimbabwe, the citizens are too poor to afford it. Yet, Bolt, a ride-hailing platform from Estonia with operations in 45 countries across Europe and Africa, has launched its services in Harare, Zimbabwe. It follows the American company inDrive.
We already had a number of players, notably Econet’s Vaya and Hwindi, operating in the country before these behemoths knocked on the door.
I think Vaya’s failures only served to amplify that sentiment that ride-hailing doesn’t work here. However, talk to some of the drivers, for inDrive especially, and they will tell you they can’t keep up with demand most times.
If we think about it, taxis (not combis) have always been a viable business in Zimbabwe and so ride-hailing, which is just taxis with added convenience can, should and are working in Zimbabwe.
Perhaps the only caveat is that the market is too small to support multiple players. And that the issue of internet access leaves a lot of potential customers out of the game.
Bolt touches down in Harare
Anyway, Bolt is coming in hot. They say they will not receive any commission from drivers for a minimum of six months. I can tell you right now, drivers will sign up en masse.
The beauty of the situation is that there are no exclusivity clauses for the drivers, for the most part. They can sign with all the ride-hailing services. In fact, almost all of them drive for the various platforms operating in the country.
That’s how we know that Vaya is not doing too well. Chat up the drivers next time you hail a ride and most will tell you they get most of their business from inDrive despite them being signed up on all the platforms.
This means, whoever wins, the drivers stand to win. Until one player knocks out the competition and then hikes up commissions, which is the worst-case scenario and likely years away.
Bolt will charge in the future and while we don’t know how much they will charge, we can assume it will be in the 18% range that it charges in countries like Kenya.
If it’s that then they are going to have a challenge competing against inDrive. See, inDrive also offered 6 months of zero commissions and is still not collecting commissions to this day. However, reports are that when the 6 month period ends, inDrive will charge less than 10% in commissions.
So, maybe Bolt will take that into consideration, otherwise drivers will decline Bolt requests in favour of the others when the free period ends. That could be the case because Bolt’s Head of Expansion says,
We are excited to be piloting our services in Zimbabwe. Our goal is not only to offer our drivers higher revenues per hire but also to ensure a high demand due to competitive prices. Accordingly, our commission is significantly lower than that of our competitors
We shall see what “significantly lower” means when the freebie period ends.
Good for the goose, bad for the gander
Bolt is coming in aggressively. I talked to some inDrive drivers and one said he’s not taking Bolt requests at the moment because the prices are too low. He did register though, something most of his peers have done too apparently.
I checked it out myself and here’s how much these six platforms are charging for a trip from Road Port (5th Street Harare) to the University of Zimbabwe (New Hall):
- Bolt – $4
- Hwindi – $5.94 (payable in ZW$)
- inDrive – $7 (negotiable)
- Rida – $6.50 (negotiable)
- TaxiF – $9
- Vaya – ZW$117,463.50 (from $8.30 to US$11.50, depending on the rate you use)
You can see just how aggressive Bolt is. However, as the driver I talked to shows, what’s good for the passenger is not good for the driver.
Do note that Bolt, inDrive and Rida are not charging commissions at the moment. They are all trying to entice users and drivers, get to dominate and knock the competition out. That means the drivers get to pocket the full amount you pay.
So why, pray tell, would a driver choose a Bolt ride ($4) when he can choose a TaxiF ($9) one? Only when there are no active TaxiF requests will one choose Bolt and Bolt is counting on the lower fares attracting users.
See, if I’m to use one right now, I would choose Bolt because that would be the cheapest option for me. I too, like the drivers, have multiple apps installed and check which one is cheapest before I request a ride.
That’s what Bolt is counting on. Riders will flock to Bolt for the low fares and drivers will be forced to accept those requests because no requests will be coming in through the other platforms.
It might become a Mexican stand-off where drivers reject Bolt rides in a attempt to force riders to request via the more expensive platforms whilst riders do the opposite.
I don’t think most people would do this though. I know many who only have one installed but word of mouth and Bolt’s aggressive marketing campaign might entice them to ditch their app of choice.
The local players
I do feel for the local players though. The budgets that the likes of Bolt and inDrive have cannot be matched locally. Can the likes of Hwindi offer zero commissions for six months too? I don’t think they can. Can they offer Bolt’s low prices? I don’t think they can.
What they have going for them is the option to pay using the ZW$. However, with the way the ZW$ loses value, they are forced to charge a premium on ZW$ fares. That’s especially the case for Vaya who then become really expensive.
See, Bolt announced that they will be investing over €500 million in the African market. inDrive has likewise invested hundreds of millions. Something local players cannot match. Yet, the foreign players still have the capacity to invest even more.
We saw inDrive zero-rate their app in South Africa. Which shows they are starting to understand the African market where internet access is too expensive for most.
So, by making their app free to use, whether one has data or not, they could just clean house. Imagine the scenes if (when?) they introduce that in Zimbabwe.
For the foreseeable future, it does appear as if it’s the rider’s market. As these companies compete, we stand to pay less. Until one emerges victorious and then hikes up prices.
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7 comments
Cab hailing industry is going to be a dog eat dog arena in Zim, which will be good for the passengers. I liked the way our kombi industry and metered taxi guys accepted the new players. In countries such as SA, Uber drivers had hard time from cab and taxi players.
Good move
I miss the old metres taxi of yesteryear which was easy to identify and there was security in that most taxi drivers knew each other.
Ok, lets expose the old people here… Who remembers the blue (at least blue in Bulawayo) Renault Rixi taxis? Those things were iconic! Great point about the drivers knowing each other. I guess the closest thing to that is going to where they rank nowadays to pick a ride. At least someone will see you go into the taxi and you can build a relationship from there.
Ive never done this ride hailing thing, but I remember years ago there being a fuss about people ride jacking in America. One of the solutions was that drivers would challenge passengers for their name and destination, but at the same time, passengers would get info on the driver like a pic, vehicle model, plate etc through the app and even offering a panic button function. Do the local apps do the same?
I’m Uber driver I need more pay for miles and minutes
To drivers Bolt will struggle to penetrate the market because their prices are to little comparing with the expenses driver face to be on road, imagine the fuel prices, bad roads, parking fees in CBD, prices of importing new cars, the list of expenses is endless.
Another thing Bolt doesn’t have support team which communicate with drivers in real time, it is not showing the total distance and the price of the ride to the driver so in short it is ambushing drivers to the fact that most drivers are shocked after finishing the ride with the money paid and those driver are not going to take new rides again
Some distance are paid low. Very terrible