Assets lenders to the rescue as Bolt plans to sign up 200,000 new drivers in Africa to meet growing demand for taxi services – TechCrunch

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Bolt, the Estonian mobility technology company that recently closed a huge round, plans to onboard another 200,000 drivers in Africa this year as it kicks off expansion to more cities within its existing markets while meeting growing demand for e-mobility. greeting services across the continent.

Paddy Partridge, Bolt’s Africa regional director, told TechCrunch that the taxi company has experienced a spike in on-demand transport services, and that the current drivers – especially in Ghana and Nigeria where “there is a real shortage of cars” are not there. enough to accommodate this growth.

Bolt currently has more than 700,000 drivers serving approximately 40 million riders in its existing seven markets in Africa.

“One of the challenges we currently face with our growth is that on the ride-hailing side, demand for our services is growing faster than we are able to get drivers on board, particularly in Western and Southern Africa . We just can’t keep up with that growth because drivers don’t have access to vehicles at an affordable price,” said Partridge.

“We need to find ways to really attract as many drivers as possible… like maximize their earning potential so we can bring people (drivers) to our platform… to solve this problem around car access.”

Paddy Partridge, Africa Regional Director, Bolt Ride Hailing. Image Credits: Bolt

Partridge said Bolt already has auto financing partnerships with banks in markets such as Kenya, Nigeria and South Africa, and plans to forge additional partnerships and explore expanding existing ones to reach more markets and drivers.

The shortage, Partridge says, is the result of supply chain challenges posed by the Covid pandemic, resulting in a rise in vehicle costs. Also, high inflation in some countries, such as Nigeria, has undermined people’s purchasing power.

However, partnerships will have to bridge the funding gap. Last November, Bolt partnered with Metro Africa Xpress (Max), a Nigerian mobility technology company, to extend lease-to-own financing to its drivers. The partnership with Max will provide financing for 10,000 energy-efficient vehicles (both electric and gas) that provide much-needed support to drivers with leased cars or taxi drivers. The taxi company hinted that it will explore similar arrangements in other markets where Max can supply its drivers.

In South Africa, Bolt has a similar agreement with FlexClub, a vehicle subscription marketplace, which allows drivers to enter the taxi industry through a lease-to-own financing model. In October last year, FlexClub signed a partnership with Untapped Global (a smart asset finance institution) to provide credit for 2,000 electric vehicles (half of which are motorcycles) to on-demand workers using platforms such as Bolt and Uber in Mexico and South Africa.

These recent partnerships with EV dealers contribute to the company’s long-term goal of increasing the number of clean energy vehicles on board its platform as part of the company’s contribution to reducing carbon emissions from using gasoline and diesel. Bolt plans to make more deals with EV dealers in Africa.

Bolt plans to enter at least two new markets in Africa this year and expand to more cities within the existing (seven) markets. Image Credits: Bolt

“One of the partnership models that we are really expanding this year is vehicle financing. So basically finding ways to buy vehicles and extend financing to drivers who want to drive on our platform… We have this partnership that we recently did with Max in Nigeria, but we believe we can work with them in other markets,” he said.

“What we’re really trying to do is use our platform and our money to make these cars more affordable and reduce the people providing the financing, such as banks or fleet managers. We are also looking at how we can work with the players developing the charging infrastructure, reducing their risk of improving their economy (of scale) so that they can roll it out faster.”

Because the demand for electric vehicles by drivers is slightly greater than that of regular taxis, the taxi driver had to educate about the value of owning a vehicle to increase adoption. Bolt shares drivers’ data, including their payment history, to help financiers assess their creditworthiness.

The company plans to increase the use of electric vehicles in all its categories, including four-wheel options, tricycles (tuk-tuks) and motorcycles (bodaboda/okada). With EVs, the focus is currently on four-wheelers, where adoption is still slow due to the high costs.

Bolt told TechCrunch it needs more vehicles to support its growth plan for the region; that is, the planned expansion of its taxi business within its existing markets and the growth of its food delivery business across the continent. In 2020, South Africa was the first African market for the company’s delivery business, followed a year later by Kenya, Ghana and Nigeria.

Bolt, Uber’s main rival in Africa and Europe, also plans to enter at least two new markets in the North and West Africa regions before the end of the year. The other current markets are Tunisia, Tanzania and Uganda.

The ride-hailing company aims to capitalize on Africa’s increasing smartphone penetration, willingness to take up new technologies, a youthful population and overall demand for on-demand transportation services.

Bolt has recently established itself as a transport and delivery company. Image Credits: Bolt

Founded in 2013 by Markus Villig, Bolt has operations in 45 countries and has recently transformed itself into a transport and delivery company, after launching car rental and 15-minute grocery delivery services. Although Villig said in a previous interview that they will use the newly acquired $709 million funding to drive the expansion of these new businesses, it appears that the focus on Africa will only be on the taxi and food delivery companies for now.

“These two complement our portfolio of products that are essentially designed to remove the need for people to own their vehicles. And we’ve seen promising results in the markets where we’ve rolled this out in Europe. And I think there is a great opportunity for that in Africa as well. But we’re trying to take advantage of that opportunity and see if it makes sense to prioritize now,” said Partridge.

Meanwhile, the growth of the global ride-hailing service industry is expected to more than double over the next seven years to $98 billion as the industry slowly recovers from the ravages of the Covid pandemic that crippled the industry. According to this report, the sector globally is expected to grow at a CAGR of 10% annually due to a spike in demand as the world embraces the ‘new normal’ that has seen activity in industries such as transportation almost completely return to regions like Africa.

As the sector recovers, companies operating in Africa and monitoring the continent have picked up momentum in recent months by launching new products and establishing operations in new countries. The Chinese Didi finally made it to the rest of Africa after successfully working in South Africa. Russia’s inDriver entered Algeria when Uber introduced PoolChance, a feature that allows riders traveling in the same direction to get discounted rides when sharing taxis.

As international e-hailing companies enter the African market, they are also increasingly faced with increasing competition from homegrown e-mobility companies such as Kenyan Wasili and Little, and South African NextNow. Public transport operators like SWVL, the Egyptian ride-sharing company with operations in Africa, South Asia and the Middle East, are breaking down barriers by formalizing public transport in emerging markets.

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