Uber and Bolt struggle to meet UK demand

In the illustration in this photo, the Uber logo appears on the phone in front of Tower Bridge in London, England, on November 25, 2019.

Peter Summers | Getty Images

London — In parts of the UK, boarding apps like Uber and Bolt has become nearly impossible at certain times of the day.

Several customers told CNBC that the app couldn’t connect to the driver in the last few weeks, causing them to be late for meetings or stuck at the end of the night out.

Others have said they have encountered exorbitant costs as a result of “surge prices” that start when the app is particularly busy. According to customers, problems tend to occur late at night or on weekends.

The problem is summarized in supply and demand. In other words, there are not enough drivers to accept all the required journeys. And it sent a price hike.

Markus Villig, co-founder and CEO of mobility app Bolt, told CNBC’s Squawk Box Europe last week that customer prices are “higher than ever.”

With a value of € 4 billion ($ 4.7 billion), Villig said demand for ride hailing after the blockade was stronger than the company expected and recovered quickly.

“The supply side from the driver’s point of view … hasn’t caught up yet,” he said.

Uber has the same problem. Demand is rising in the UK, while the number of drivers is about 70,000, the same as before the pandemic, he told CNBC.

Uber’s UK operations returned to pre-pandemic levels in May, and many cities are experiencing demand above pre-pandemic levels. Demand is 22% higher in Birmingham, 30% in Sheffield and more than 40% higher in Nottingham than before March 2020.

A spokeswoman for Uber’s UK business said, “As the city re-starts, we are encouraging the registration of 20,000 new drivers to meet rider demand.”

Difficulty of boarding

Robert Collings, chief financial officer of fintech startup Flux, told CNBC that both Uber and Bolt have recently disappointed him in London.

“People should be able to call for a ride and get there within minutes, but lately I’ve been experiencing long wait times and cancellations and are starting to consider alternatives,” he said. rice field.

He shared a recent example of trying to get Uber at 1am on weekdays. He said several drivers accepted and canceled the ride, during which time the estimated price rose from £ 11 to £ 28. He then switched to Bolt and faced similar cancellation issues before the driver finally appeared.

“I probably only waited 15-20 minutes from the first time I opened the app to getting into the car, but if I just want to go home and sleep, it feels much longer,” Collings said. ..

Elsewhere, London-based video conferencing platform chief product officer Dave Thomson told CNBC that he and his wife are now checking Uber, Bolt, and FreeNow to increase their chances of finding a vehicle. Told.

“”[We] Open all three apps at the same time to see who can take a taxi first, “he said.

The problem is not limited to the UK, but customers in cities such as Lisbon, Paris, Warsaw and Melbourne are also dissatisfied.

Drivers move to food delivery

During the pandemic, many drivers stop working on apps like Uber and Bolt and move on to new jobs that are covered by employee benefits such as sick leave and holiday salaries, but they are less flexible. I am.

“Currently, there is a significant shortage of drivers,” ride hailing expert Harry Campbell told CNBC that the early pandemic ride hailing decline was a significant demand for food delivery services. He emphasized that it was consistent with the increase.

Drivers have also noticed that they can use their cars to carry food on behalf of others.

“Many ridehail drivers switched to delivery during a pandemic and found that wages were equal and people didn’t have to deal with it,” Campbell said.

After all, Peparoni Pizza and Chicken Korma do not blame the driver for accidentally turning in the wrong direction or vomit throughout the car.

Better payment?

Uber and Bolt are now on a mission to get more drivers back on the platform.

In April, Uber said it would spend $ 250 million on a one-off stimulus aimed at getting drivers back on the road.

Uber CEO Dara Khosrowshahi told CNBC on Tuesday. “So in the second quarter we were really into supply, especially in the United States, revitalizing our driver base and expanding our driver base in the United States. Now, in the third quarter, the benefits of that initial investment You can see it. “”

“I think we’ll see pricing relaxed and volume especially accelerates later in the year,” he added.

Sam Lasithi, Bolt’s Western Europe Regional Manager, told CNBC: “Bolt, like everyone else, wants to register more drivers.”

Looking to the future, data scientist Tassos Noulas, who studies urban mobility, told CNBC that the ride-haling industry is “definitely in the process of formation.”

“I think different players will compete for the workforce, and at least drivers should get better rewards,” Nuras said. “But what does this mean for the economic feasibility of the ride hailing business? They have always been a big risk … taxi drivers may eventually win the game.”

Uber and Bolt struggle to meet UK demand

Source link Uber and Bolt struggle to meet UK demand

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