Ride-hailing platform Bolt, formerly known as Taxify, has announced the launch of Bolt Go in South Africa - a ride-hailing service that is 20% cheaper than its normal Bolt offering.

The ride-hailing company has said that Bolt Go lowers the barriers to entry into the South African ride-hailing industry by allowing owners and drivers of smaller hatchback cars to access the Bolt platform and earn an income. This is something they can't do on Bolt's competitor in South Africa, Uber.

“Smaller hatchback cars are less expensive to purchase, have lower maintenance costs, and are more fuel-efficient to operate than Bolt’s regular larger sedan cars. These lower operational costs also enable Bolt Go fares to be significantly more affordable,” said Gareth Taylor, country manager for Bolt in South Africa.

Race to the bottom?

The ongoing coronavirus disease 2019 (COVID-19) pandemic has affected many businesses and many people's income. More especially people whose income depends on ride-hailing as the various lockdowns around the world have, to some extent, meant less traveling and as a result less income for them.

However, even before the pandemic, it could be argued that ride-hailing incomes (for drivers) were already a race to the bottom.

In South Africa for example, Bolt's standard service was already, on average, cheaper than the Uber X offering - the cheapest service by Uber in South Africa. But saying this about Uber is deceptive because already, from anecdotes, some Uber X drivers have been protesting and complaining about how little they make and how they have to constantly be making trips just to barely meet their running costs.

This begs the question, at what point does it become unsustainable?

Or will we continue to see new cheaper offerings as the platforms look to squeeze every cent?

Availability of Bolt Go across South Africa

Bolt has said that its new cheaper service will initially be introduced to secondary provincial cities and towns across South Africa, and then in the large urban areas of Gauteng, Cape Town and Durban.

Time and kilometre-based rates vary between locations but will always be approximately 20% more affordable than Bolt’s standard sedan category.

“Because Bolt Go has been designed for hatchback drivers, the service is not ideal for trips with lots of luggage – for example to the airport ahead of a big holiday – but it’s perfect for people wanting to quickly, safely and affordably get to work, the shops or to family – all dependent on the COVID-19 regulations at any time,” said Taylor.

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