We recently spoke to the country manager for Bolt in South Africa, Gareth Taylor.

Bolt is a digital platform that provides ride-hailing and scooter-sharing services, and it has more than 25 million users in over 30 countries^[1]. Gareth has a long history in social entrepreneurship, having previously worked as the incubation manager at the Awethu Project, where he headed up a programme providing real-world training and support to entrepreneurs who want to grow and formalise their businesses. We sat down with him to discuss the key factors necessary for microenterprises to grow and scale, how the Bolt business model works towards financial inclusion, and how the e-hailing platform has pivoted to address the impact of COVID-19 on drivers who use the platform in South Africa.

Roland Banya: Given your wide-ranging experience in the social enterprise space, what is necessary for microentrepreneurs to grow and scale?

Gareth Taylor: Three of the most crucial factors for microenterprises to grow and scale are access to markets, cash flow, and overcoming barriers to entry. The Bolt business model is designed to help overcome these barriers. From the time the app is switched on, a driver has access to markets and need not worry about advertising and sales, as these are managed through the app.  With regard to cash flow, we incentivise customers to pay for their trips in cash, as high levels of cash flow mean that operating expenses can be readily met by drivers on a day-to-day basis. We also have limited barriers to entry for engaging on the platform. To join the platform, our driver-partners need to not have a criminal record, they need a professional driver’s permit, and access to a vehicle. This means that anyone from the age of 21 can start operating on the platform, making it a low-barrier channel of self-employment (for the youth in particular).

RB: You mentioned low barriers to entry for the youth. What about women’s participation in the e-hailing industry?

GT: Despite the low barriers to entry in the e-hailing industry, sadly less than 5% of drivers using the platform are women. Conversely, during my time at the Awethu project, 53% of the entrepreneurs we reached were women. Legacy issues related to safety and security concerns for women in South Africa make more equal participation in the transportation services space extremely challenging. We are continuing our discussions with development partners, like the International Finance Corporation, with plans to design interventions that could reach more women in the future.

RB: How does Bolt broaden access to financial products for e-hailing drivers?

GT: Insurance plays a big role in managing the potential impact of the risk events faced by drivers and passengers while on an e-hailing trip. Initially, we made comprehensive insurance a prerequisite for drivers joining the app. However, we discovered that drivers were often signing up for insurance to meet the platform requirements, and then allowing policies to lapse within a few months of joining. To overcome this, Bolt has taken out passenger liability insurance at no cost to drivers, for all the vehicles on the platform. We’ve also recently launched Bolt Trip protection – a trip protection insurance product which allows for the rider and driver to be insured against the risk of disability, emergency medical benefit and death, and it covers all users of our platform (both drivers and riders) at no cost to them.

Our next financial inclusion goal is innovating around ways that drivers can qualify for formal finance to enable them to buy the cars that they use. We’ve found that most of the drivers on the platform rent their vehicles, rather than owning them. We estimate that these drivers could save between R3,000 and R4,000 a month in fixed operating costs if they were able to access vehicle financing, rather than being subject to high-cost vehicle rental arrangements. During the COVID-19 pandemic, we encouraged our drivers to negotiate down the rental costs with the vehicle owners they rent from, to help them manage liquidity constraints.

RB: On the topic of COVID-19, what has the impact of the pandemic been on e-hailing operations, and how has Bolt pivoted to adapt?

GT: Besides the lockdown restrictions on movement of people, the risk of infection and transmitting the virus has had the greatest impact on the drivers’ ability to earn. Our first response has been focused on education and safety. We partnered with Harambee Youth Employment Accelerator to educate and train Bolt drivers on how to keep themselves and passengers safe from the virus. In some vehicles, we installed protective shields between drivers and riders to limit the risk of viral transmission, and we’ve found that drivers with the isolation screen are typically earning more than drivers without this feature.

During Level 5 of the South African national lockdown, fewer people were being transported, and there was more demand for transportation of goods. In response to this demand and to ensure that the drivers were able to work, we launched a service that enables e-commerce players to execute on last-mile B2B delivery services as well as one that connects households to restaurants for the delivery of online food orders. In addition to these new platform offerings, managing the supply and demand sides of our e-hailing network has been critical in balancing the earning power of drivers during the crisis. As a supply-side intervention, we’ve actively slowed down the recruitment of new drivers until the earnings level recovers to where it was pre-COVID-19. On the demand side, we’re providing discounts to passengers to incentivise riders to use the platform. We’re also launching Bolt Go, a category for smaller cars and hatchbacks, that costs 20% less than regular Bolt rides.

RB: How has regulation impacted your operations; what is your outlook for the e-hailing industry in Africa?

GT: Under South Africa’s new  National Land Transport Amendment Bill, e-hailing has finally been recognised as a form of public transport. This triumph for our sector made it possible for e-hailing – as a separate category of public transport – to be allowed during the national lockdown. I’m proud to say that we played an integral role in achieving this through our deliberations with policymakers at the provincial and national levels, and we’ve worked closely with the Departments of Transport as well as the Department and Trade and Industry during the pandemic. We shared insights on the health and safety initiatives we’ve put in place and continue to provide inputs on international best practice for public transport, specifically for sedan-type vehicles.

Despite the pandemic, I remain bullish about the e-hailing industry, not only in South Africa but across Africa. As a business, we’ve seen marked growth in the e-hailing market from 2017. Although the e-hailing industry currently accounts for 2% of all urban trips in South Africa and elsewhere, our forecasts suggest growth to 25%−30% in the next decade. A large segment of the African population requires safe and reliable transport but doesn’t necessarily have access to formal credit to buy a private vehicle. In South Africa, this is exaggerated by historical spatial divides. E-hailing helps overcome this development challenge through its pay-as-you-go transportation model, which enables everyday people to move safely, affordably and conveniently.

Cenfri is also thankful to Gareth Taylor for participating as an expert speaker in insight2impact’s webinar on Africa’s e-hailing industry.

For more data and insights, access our related research here:

• Livelihood experiences of Nigeria’s e-hailing workers
• The potential of digital platforms as distributors and enablers of financial services in Africa (2020)
• Insurance in e-hailing (2019)

[1] https://www.crunchbase.com/organization/mtakso#section-overview

insight2impact (i2ifacility) was funded by Bill and Melinda Gates Foundation in partnership with Mastercard Foundation. The programme was established and driven by Cenfri and Finmark Trust.