Competitor of Uber, Bolt, struggles financially due to prolonged legal disputes
Bolt Struggles with Financial Losses and Legal Challenges in the UK
In the rapidly evolving world of ride-hailing services, Bolt, the Estonian-based company founded by Markus Villig in 2013, has faced a series of financial and legal hurdles in the UK market.
The latest financial results, reported by City AM, show a significant drop in Bolt's performance for 2024. The company reported a pre-tax loss of £47.6m, a stark contrast to the pre-tax profit of £133,355 achieved in 2023. Bolt's turnover also decreased from £520m to £488.1m during the same period.
The decrease in revenue was due to increased demand incentives and a one-off VAT credit, resulting in a headline turnover drop of £31.8m. However, Bolt's turnover before incentives and VAT under the Tour Operators' Margin Scheme (TOMS) increased by £50.8m in 2024.
Transportation service costs increased by £25.6m, while legal provision costs rose by a substantial £50.5m in 2024. These costs were largely attributed to Bolt's focus on managing ongoing legal proceedings.
One of the major legal cases involved the worker status of Bolt's drivers, which was heard by the Employment Tribunal in September 2024. A decision was handed down in November, finding that Bolt drivers should be recognised as workers.
In a separate court case, a federal police officer acted as a witness in a case related to driving without a license in 2024. It's worth noting that this person was a law enforcement officer, not a lawyer.
Bolt has also faced government inaction on the 'taxi tax,' leading the company to withhold £200m of investment in the UK over the last three years. In response, Bolt sent a stern warning to Chancellor Rachel Reeves over the potential 20 per cent VAT hike for taxi firms.
Despite these challenges, Bolt has made strategic moves to strengthen its presence in the UK. In May, the company appointed Kimberly Hurd as its first senior general manager for the UK, indicating a focus on the second biggest market.
Meanwhile, Bolt's main competitor, Uber, also reported its financial results for 2024. Uber's pre-tax profit in the UK declined from £29.3m to £21.6m over the same period, despite a surge in revenue from £5.2bn to £6.5bn. Uber has warned it may not remain profitable in the UK due to rising costs.
Uber needs to generate and sustain increased revenue levels while lowering proportionate expenses to achieve profitability in many of its largest markets. The company's latest financial accounts for 2024 were filed with Companies House.
In a notable development, Bolt received a warning from HMRC to block the use of TOMS, but the Upper Tax Tribunal rejected the appeal in March 2023.
As both Bolt and Uber navigate these challenges, it remains to be seen how they will adapt and grow in the UK market. Bolt has scheduled a financial liability remedy hearing to take place during the second quarter of 2026, and the company has filed an appeal against the Employment Tribunal judgement.
Stay tuned for further updates on the evolving story of Bolt and Uber in the UK market.
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