Boyden Executive Search

Uber is facing growing competition in markets all over the world. One ride-hailing rival in particular, Estonia-based Bolt, is making strategic gains.

Since its founding six years ago by Markus Villig, Bolt has become Uber’s biggest challenger in Europe and Africa. In Poland, for example, Bolt undercut Uber, offering customers cheaper fares and charging drivers lower commissions. In Kenya, it outmanoeuvred and won business by adding motorbike rides to its service and letting passengers pay with a popular mobile payments app.

In Villig’s estimate, Uber has not made Eastern Europe or Africa a priority because “they have bigger battles elsewhere.” In fact, he says one of the reasons he started Bolt was that he was frustrated by his small Baltic nation’s taxi service and didn’t expect Uber to become available anytime soon. Once Bolt caught on in Estonia and the other Baltic States, underserved markets in Eastern Europe and Africa became its primary focus. About half of Bolt’s business now comes from Africa.

Uber is the world’s biggest ride-hailing company, and it is set to go public next month at a valuation as high as $100 billion. Still, complacency is not an option. New competitors, including many small, local firms, have been cropping up all over the world. In India, it has Ola to contend with. In Brazil it faces China’s Didi Chuxing. Uber owns a stake in Didi Chuxing, but the Chinese firm has started to pose a threat since buying local ride-hailing firm 99 last year.

In some big, highly competitive markets, including China, Southeast Asia and Russia, Uber has retreated altogether. Bolt, meanwhile, is prepared to make a go of things in Russia. It launched ride-hailing operations there on April 18. It will likely face many of the same labour and regulatory challenges with which Uber has struggled over the past decade there and elsewhere, the New York Times notes.

The competitive pressure, bearing down on Uber in 700 cities worldwide, is getting expensive. To fortify its position in the Middle East, Uber recently bought its biggest regional competitor, Careem, for $3.1 billion. It has also upped its investments in Eastern Europe and Africa in response to Bolt’s successes. Such cost increases are coming at a time when competitors are stunting its growth. Last year Uber lost about $1.8 billion and spent about $14.3 billion, and is set to continue losing money.

Bolt, the bullish Baltic upstart, is focused on growth. It currently operates in 30 countries and more than 100 cities. Now it is eyeing London, Uber’s biggest market in Europe. Bolt has also gained traction in attracting investment. Last year, investors including the Daimler and Didi Chuxing put $175 million into Bolt. It is now working on another round of funding.

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