inside Owerri; Bolt drivers are manipulating the algorithm.
Bolt is an Estonian mobility company that offers vehicle for hire, micromobility and in some parts of the world; car-sharing and food delivery services. the company is headquartered in Tallinn and operating in over 300 cities in 45 countries, from a big city in Europe, to a tiny town in Nigeria called Owerri. Bolt is fast becoming the most used hailing app in Nigeria, because of its affordability, and also its boldness to move into different cities in Nigeria. shame to its counterpart; UBER (but we are not talking about UBER TODAY). Bolt has become so successful in Nigeria, every day over 1,000 rides are taken across cities, Bolt is so successful in Nigeria because it is convenient, strategic and not classist. (again, UBER in the Poto Poto)
in Owerri where I live, Bolt is our go-to app for moving around. I use bolt at least 30 times a week, because I don't own a car, and let's just say, I enjoy being driven. recently Bolt has become too expensive, and Bolt justifies this craziness with what is called “surge” a surge happens on the Bolt app when there are too many riders and not enough drivers. before we get into the surge conspiracy, let me explain how Bolt calculates its price.
Bolt pricing is very simple; start with a base fare, add the per minute rate multiplied by the time spent in the car, plus distance, times the per-mile rate all of which depends on the city. a 1,500 naira ride in Owerri, will cost over 2,500 in Lagos. unless there are too many riders, and not enough drivers, in which case, multiply by a surge price; 1.7, 2, 3 or during Christmas 5 times the normal price. bolt also uses machine learning to predict how much you are willing to pay based on the route, so don't call a bolt from the government house to the Sheraton hotel (except Sheraton doesn't exist in Owerri).
now that we have established the pricing strategy, why does a surge happen all the time in Owerri? remember I said, I use Bolt at least 30 times a week, this is because I have so much to do in 7 days; getting around the office, church, lunch with my friends and just being a baby boy. so it hurt me badly, to see the exorbitant amount of most fares recently. At first, I thought it was just a surge until I decided to investigate because it started making no sense. first of all, I spoke to an acquaintance that works at Bolt, then engaged different drivers, and finally my friends, which uncovered the mystery, that drivers log out at the same time, creating a shortage and triggering a surge. what could be the cause for such a vile act? continue reading to find out.
THE EGO
Owerri is home to the indigenous Igbo tribe, and if you are familiar with the tribe, you will understand that our ego wins in the battle of life. getting a job in Nigeria is like fitting a cow into a needle, it is almost impossible. the pressure is even more when you have managed to get a degree and in all honesty, Bolt is not quite the ideal job. Igbos are mostly conservative, and despite us being the most hardworking and financial literate tribe in the whole of Africa, our views on jobs are still very “tight”. so many Bolt drivers are looked down upon by their customers, one told me; “I am a first-class graduate, don't be judging me because I am doing this thing”. ‘’this thing’’, he is implying Bolt. some of them believe that because you ask certain questions, or appear a type of way, automatically you are looking down on them.
BOLT CAN BE A BITCH:
Bolt is quick to point you to their ad “make 500,000 thousand monthly’’ while this may be true, so many things are left out from that eye-catching ad. Bolt does not include the depreciation of cars, maintenance, gas and some insurance. At the end of the day, a good number of drivers are at a loss after all monthly deductions. you might say, Bolt is supplementary, a good way to make some extra cash, which is true. about 50% of drivers have a primary source of income unlike a normal job, you are at liberty to drive whenever you want, but the reason most people don't drive more is that Bolt considers its drivers, not employees but independent contractors. employees are entitled to minimum wage, gas reimbursements, paid leave and health insurance, which will cost Bolt a huge amount of money yearly, so they are careful to call drivers - partners and itself not a transportation company but a platform; connecting riders to drivers, who decide, when to work, what to wear etc. but Bolt controls the price, that's what makes them a bitch, sometimes.
NB: if drivers are independent, Bolt setting their prices should be called price-fixing (oops), so which are they? if Bolt takes a cut from drivers, their interest should be the same, regulation, of course, slows its growth, but I love to believe that there is another reason. drivers compete, but bolt makes the same commission regardless of who picks you up, bolt makes more money with more drivers, but drivers want the exact opposite; less competition. they look like other platform vendors relationship; JUMIA and their sellers, play-store and app developers, both of which needs their vendors, if an app leaves the play-store, they cant be replaced, but drivers are drivers- bolt needs them- but no one in particular; they’re disposable. something like a 96% stop driving for the company in their first year. the two seem economically intertwined, but as long as Bolt can find more drivers, they can keep fares unsustainably competitive with rivals.
THE PROFIT FIGHT:
on paper, Bolt has the perfect business model: its huge network of drivers scattered all over, but it need not buy a single car or a litre of fuel. all perk and no work, something most Nigerian startups try to emulate. so why are drivers, creating so much atrocity for Bolt, and leaving them at loss? a driver said because Bolt puts everything in the hands of their customers; rating a driver can make or mar them on the app. and if a customer makes a complaint about a driver, they are blocked from the app, so riders are treated like eggs. except, you can't eat them. Bolts biggest problem may not be its legality, or controversy although there's plenty of that, but so many holes in its business model. the magic of so many silicon valleys companies is the network effect. every new customer makes it that much easier to get another. you join Facebook, Instagram or Twitter because your friends are there, and so on. but for Bolt, this is not the case, more drivers in Lagos, does nothing for those in Owerri. every city is a new chicken and egg problem; drivers need riders before they'll drive and riders need drivers before they'll ride. this helps keep prices low, and profits, nonexistent. it is inescapable and leaves only one path for Bolt: self-driving cars. remove the drivers, who are money eating vultures. but it means competing with the technology of Google and the ingenuity of Elon musk (that didn't sound right, but okay). either it'll transform into one of the biggest transportation companies, or it'll fall “YAKATA”. Bolt needs to fix up, and what better way to do this, than calling an emergency meeting and re-evaluating their goals. there have been too many stories, for Bolt not to take action, by action I mean real action- and not writing press releases filled with too many “shalaye”.
coming back to what is happening in Owerri, who is to blame? the greedy drivers? or the company that is not well structured?
ooh follow me on Twitter @_kennyowen or send me money because I am a baby boy.
