Bolt will allow drivers to set their own fares on the platform. It looks like a progress when we first look at it. According to Bolt’s Western Europe Manager, “Drivers have consistently asked us for the ability to set their own prices so they can ensure a journey is profitable enough before it’s accepted. These changes are part of that philosophy and will create a better functioning marketplace.”
It follows Uber’s move that increased its fare by 10% overall and up to 25% at airports, during peak-times. And it is another strategy in an attempt to attract more drivers and tackle the shortage of it.
But is it really a positive thing for drivers?
Bolt drivers competing when setting fares
As drivers will be able to set their fares, we may wonder how this will impact the job allocation activity. Drivers competing with eachother independently may bring the fares down. Indeed, they may just fight for every single job by dragging prices down.
This may result in more struggle for those setting a higher fare. More waiting time, less allocated jobs and earnings per hour affected. The only alternative to resolve these issues would be to decrease their fares.
Let’s not forget that drivers setting fares are means no surge available. And that will also impact the general level of surge on the App. The more drivers off surge but online, the less intense the general level of surge will be.
The Cribble case
We remember that in 2019, Cribble tried to launch with a similar selling point. In theory, drivers using the App could set their fares freely.
However, TfL did not approve the mechanism. It stated that the model would make drivers “Plying for Hire”. It stripped out Cribble of any licence right. The App tried to do a forced launch but ended up closing down as a result.
In a statement, TfL declared that “based on our understanding of how the app works, any private hire drivers working via the app would be plying for hire which is unlawful. Any licensed private hire driver found to be plying for hire – through the Cribble app or otherwise – risks prosecution and licensing action by TfL”.
If this new feature is not judged unlawful by TfL, there is still a way for Bolt drivers to benefit from it.
If drivers cooperate…
The only way for Bolt drivers to get the most out of this change would be to coordinate themselves. Drivers would need to agree on a certain level of price before setting their fares.
That way, that would create a rising pressure on prices. And riders will have no choice but to book it or to try with another App.
Uber is already rising its fares on its own. The others should follow to. That is why drivers should set prices that make it pointless to book on another app. Any pricing equal or slightly below the competition would do.
But again, all of this will only work if Bolt drivers can agree on a coordinated action. A thing that is blatantly lacking in the industry. We just need to see the proportion of drivers generally attending demonstrations or meetings.