Uber rival Bolt not making layoffs despite coronavirus hitting sales

Bolt CEO Markus Villig speaks on stage at the Web Summit 2019 technology conference in Lisbon, Portugal.

Horacio Villalobos | Corbis via Getty Images

European rival Uber Bolt said he was not laying off staff despite the impact of the coronavirus pandemic, highlighting a different direction than that of the giants driving in the United States.

The Estonia-based company, like other players, was hit hard by coronavirus blockages across Europe, with sales falling 75% in mid-March compared to average revenues in February. The company says reservations in Slovakia have collapsed 100% after the country banned taxi services in March. The ban has since been lifted.

This reflects a similar trend affecting competitors. Uber’s passenger transportation activity suffered an 80% year-over-year decline in bookings in April, while Lyft recorded a 75% decline in travel this month. The two companies have taken deep cost-cutting measures, with Uber laying off 3,700 workers and Lyft laying off 982 workers.

Markus Villig, CEO and co-founder of Bolt, said the company was more frugal than some of its competitors and therefore did not have to make any layoffs. Bolt is one of Uber’s main competitors in Europe – the others include BlaBlaCar and Kapten.

“Fortunately, we come from a very frugal background from the start,” Villig told CNBC in an interview last week. “Our approach has always been to build a lean and profitable organization.”

The company says it has put certain subcontractors in touch for a “limited” period, but expects them to return to work once the business is re-established.

Bolt, renamed Taxify last year, has increased its investments in segments such as scooter sharing and food delivery. It recently unveiled a new electric scooter and announced an extension of the service in 45 other cities. Villig said the strategy was working in favor of Bolt because the locking restrictions prevent people from being able to move freely.

“We are not planning any layoffs,” he said. “The focus is on adapting the business of running to work with scooters and food, in these times when people are just not able to move or prefer not to ride on board.”

However, sharing scooters has proven to be a difficult business to sell to consumers during a pandemic. American start-ups Bird and Lime have had to cut jobs in recent weeks, while Lime has also received a boost from Uber and other investors to help it survive the pandemic. Villig admitted that the margins for scooters were “tiny”, but added that he thought it was “great free service” for taxis.

Although he cannot rule out the possibility of layoffs further, the Bolt chief said he was relatively optimistic about the prospects for carpooling, as several European countries are gradually lifting their restrictions. Germany, France and Italy are among the nations that have already started a gradual reopening of their economies, while the United Kingdom has presented its plan to ease the foreclosure measures.

The company told CNBC in December that it had reached breakeven or reached profitability in two-thirds of the markets in which it operates. But, the pandemic has resulted in a “big reset” for transport start-ups, according to the CEO of Bolt.

“It’s hard to expect what’s going to happen in the next six months, but we were clearly on the road to being fully profitable earlier this year, and we will now continue on that path,” said a- he declared. The group lost 61 million euros ($ 66 million) on sales of around 80 million euros in 2018.

After obtaining 50 million euros in debt financing from the European Investment Bank, Bolt now wishes to raise a new fundraiser during the year. Villig said the company is “on the go” with its investors – which include German automaker Daimler and Chinese haulier Didi Chuxing – but added that Covid-19 has pushed back its fundraising efforts. The company was last assessed by investors at $ 1 billion, which gives it the status of “unicorn”.

Source link

Related Posts

error: Content is protected !!