Uber Rival Bolt Sidesteps Layoffs Despite Losses

The Estonia-based rideshare unicorn Bolt — Uber’s main competitor in Europe — said it isn’t laying off any workers despite a 75 percent drop in sales.

Markus Villig, Bolt’s co-founder and CEO, pointed to the firm’s frugal approach to business as helping to keep layoffs at bay.

“Luckily we come from a background of being very frugal from the get-go,” Villig told CNBC. “Our approach has always been to build a lean, cost-efficient organization.”

Bolt rebranded from Taxify in 2019 and upped its scooter-sharing and food delivery divisions, a move that Villig said was ideal as stay-at-home mandates changed everyday life. The company first started food delivery in Estonia in August of 2019.

“We’re not looking at doing any layoffs,” Villig said. “The focus is on adjusting the business from ride-hailing to now work with scooters and food, in these times when people are just not able to move or don’t prefer ride-hailing.”

Villig said he can’t say for certain that there won’t be layoffs at a later date, but as some European countries start opening, he thinks ridesharing will pickup.

In South Korea, Germany and China, however, new spikes in infections have hampered attempts to roll back lockdowns. In Spain, about 50 percent of the country will go into the first phase of reopening efforts. Harder-hit areas like Madrid and Barcelona will still have restrictions.

Uber announced 3,700 layoffs this month, and CEO Dara Khosrowshahi is giving up his $1 million base pay until the end of 2020. During the week of April 20, rides with Uber were down 85 percent compared to the same week in 2019.

Lyft laid off 982 employees and furloughed 288, about 17 percent of its workforce. In addition, a 30 percent reduction in pay was instituted for executive leadership — 20 percent for vice presidents and 10 percent for all other exempt employees.

Bolt closed a €50 million funding deal from the European Investment Bank (EIB) in January to help it scale throughout Europe and improve its technology. It is one of several startups trying to topple Uber’s control in the ride-hailing space.