bolt-business-model

How Does Bolt Make Money? Bolt Business Model In A Nutshell

  • Bolt is an Estonian company offering car-sharing, food delivery, and micro-mobility services. The company was founded in 2013 by Markus Villig, who identified that the taxi industry in Tallinn was ripe for disruption.
  • Bolt operates under a marketplace model, matching drivers and restaurant owners with consumers. Depending on the service and order specifics, the company charges commission fees, delivery fees, service fees, and small order fees.
  • Bolt also charges for e-scooter and car hire and sells its taxi dispatch software to interested parties. Lastly, the company sells its technology to entrepreneurs who want to launch similar platforms and reduce their time to market.

Origin Story

Bolt is an Estonian company offering car-sharing, food delivery, and micro-mobility services. The company was founded in 2013 by Markus Villig.

The inspiration for Bolt came after Villig experienced difficulty booking a taxi online after attending a Garage48 hackathon event. Despite also studying for his high school exams, he immediately began work on a new platform to revolutionize the taxi industry in the Estonian capital Tallinn. At the time, the industry was dominated by taxi companies using an outdated model where rides could only be booked through an operator in a central station.

Villig then developed an early prototype for his idea with a €5,000 loan from his parents. He also approached taxi drivers directly to gauge interest, with around 100 signing up to be featured on the platform. The platform, known as mTakso, was launched in August 2013 and later rebranded as Taxify – an aggregator of local taxi services.

Many taxi drivers were initially hesitant to sign up for the service, but Villig worked hard to drum up support over the next six months. As the app began to gather momentum, Villig hired brother Martin and freelance software developer Oliver Leisalu. The entire code base of the app was rewritten, allowing consumers to see a driver’s location in real-time.

Bolt raised €1.4 million in December 2014 and started to scale very quickly. This was facilitated by expansion into other European countries and the ability for any driver to join the platform regardless of background or experience level. September 2018 marked a pivotal month for the organization. After introducing e-scooters to the streets of Paris under the brand name Bolt, Taxify became known as Bolt a few months later. 

Bolt posted revenues of €221.4 million in 2020. Unlike similar ride-sharing providers, the company emerged relatively unscathed from the coronavirus pandemic after expanding into food delivery in late 2019.

Bolt revenue generation

Essentially, Bolt operates under the marketplace business model as a connector of restaurants and drivers with consumers.

We will explain this model in more detail below.

Commission fees

Depending on the city, Bolt collects a 15-20% commission fee from the total cost of each ride it facilitates. This fee applies to both cash and card rides but does not apply to driver tips, bonuses, airport, or toll fees.

The company also charges restaurants a similar commission for every order they receive through the Bolt platform. This commission is undisclosed, though fees from similar companies range anywhere between 20 to 35%.

Service and delivery fees

Bolt also charges customers a service fee for using its platform. This fee amounts to no more than 10% of the total fare.

For those ordering food, a delivery fee is also charged depending on geographic location. A small order fee is also applicable to food orders less than the minimum order price.

Rentals

Bolt also charges customers for e-scooter hire. The cost is €1 to unlock the scooter plus €0.15 for each minute of usage.

Cars can also be hired through the Bolt Drive program, a low-cost, safe, and convenient car-sharing solution. 

The minimum fee per trip is €1.50, with prices starting at €0.07 per minute depending on the type of car model rented and the distance traveled. Fuel, parking, and insurance are all included, but a reservation fee will also be charged if the length of the hire exceeds 15 minutes.

Subscriptions

Bolt also makes money by selling its dispatch software to taxi companies. The software helps these companies cut costs, increase dispatch efficiency, and get more rides.

The company offers a free 30-day trial period, after which an undisclosed fee is charged.

Franchises

For entrepreneurs wishing to emulate Bolt’s ride-sharing success, the company also sells its technology under a franchise model.

Since these entrepreneurs take advantage of the Bolt brand and innovation ability, it can be assumed the company takes a portion of any subsequent revenue.

Connected Business Models

DoorDash

how-does-doordash-make-money
DoorDash is a platform business model that enables restaurants to set up at no cost delivery operations. At the same time, customers get their food at home and dashers (delivery people) earn some extra money. DoorDash makes money by markup prices through delivery fees, memberships, and advertising for restaurants on the marketplace.


Glovo

glovo-business-model
Glovo is a Spanish on-demand courier service that purchases and delivers products ordered through a mobile app. Founded in 2015 by Oscar Pierre and Sacha Michaud as a way to “uberize” local services. Glovo makes money via delivery fees, mini-supermarkets (fulfillment centers that Glovo operates in partnership with grocery store chains), and dark kitchens (enabling restaurants to increase their capacity).


GrubHub

grubhub-business-model
Grubhub is an online and mobile platform for restaurant pick-up and delivery orders. In 2018 the company connected 95,000 takeout restaurants in over 1,700 U.S. cities and London. The Grubhub portfolio of brands like Seamless, LevelUp, Eat24, AllMenus, MenuPages, andTapingo. The company makes money primarily by charging restaurants a pre-order commission and it generates revenues when diners place an order on its platform. Also, it charges restaurants that use Grubhub delivery services and when diners pay for those services. 


Instacart

how-does-instacart-make-money
Instacart’s business model relies on enabling an easy set up for grocery stores, the comfort for customers to get their shopping delivered at home, and an additional income stream for personal shoppers. Instacart makes money by charging service fees, via memberships, and by running performance advertising on its platform.


Lyft

lyft-business-model
Lyft is a transportation-as-a-service marketplace allowing riders to find a driver for a ride. Lyft has also expanded with a multimodal platform that gives more options like bike-sharing or electric scooters. Lyft primary makes money by collecting fees from drivers that complete rides on the platform.


Postmates

postmates-business-model
Postmates is a food delivery service built as a last-mile delivery service platform connecting locals with shops. Postmates makes money by collecting fees (commission, delivery, service, cart, and cancellation fees). It also makes money via its subscription service (called Unlimted – $9.99/month or $99.99 annually) giving free delivery on every order of more than $12.


Uber Eats

uber-eats-business-model
Uber Eats is a three-sided marketplace connecting a driver, a restaurant owner and a customer with Uber Eats platform at the center. The three-sided marketplace moves around three players: Restaurants pay commission on the orders to Uber Eats; Customers pay the small delivery charges, and at times, cancellation fee; Drivers earn through making reliable deliveries on time.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"