Uber ridehail rivals Bolt turn pre-tax UK profit despite VAT changes

Image credit: Bolt

Bolt, Uber's ride-hailing competitor, has dramatically reversed its fortunes, shifting from a pre-tax loss of £47 million in 2022 to a pre-tax profit of nearly £8.3 million in 2023, according to accounts filed with Companies House over the weekend.

This turnaround was largely driven by a tax credit exceeding £80 million, which also significantly boosted Bolt's net assets, climbing to £45 million from over £22 million in liabilities the previous year.

Ridehail giants Bolt highlighted operational and regulatory developments in its 2023 strategic report. The year was dominated by the potential impact of VAT changes and risks associated with worker status, alongside evolving challenges in the competitive ride-hailing market.

A crucial moment in 2023 was the tax tribunal ruling in December, which placed Bolt's services within the scope of the Tour Operators' Margin Scheme (TOMS). This decision means that Bolt now pays VAT on the margin between passenger fares and driver earnings, a move that has implications for the company's operating margins. The ruling followed a year of reduced investment in rider and driver incentives compared to 2022.

Despite these challenges, Bolt made strides in enhancing user experience and safety. New features such as expanded selfie checks, driver trip sharing, and unsafe area mapping were introduced, alongside trauma counselling services for victims of severe incidents. The company also laid the groundwork for future benefits, including a pension scheme and earnings top-ups for drivers, set to launch in 2024. Notably, Bolt expanded its service offerings by launching a taxi service in London, aiming to diversify its product range.

The regulatory landscape continues to pose challenges. In response to changes in the UK’s regulatory environment, Bolt altered its ride-hailing model in 2022, leading to revenue being recognised on a gross basis from August that year. This shift contributed to a significant increase in revenue for 2023, with turnover rising to £520 million, up from £238 million in 2022.

However, the competitive pressure remains a significant concern for the operators. Within the financial report submitted it listed concerns over competitors offerer similar services at lower prices, which in turn risks Bolt losing customers. The company is focused on continuously updating its services to retain its user base.

Looking ahead, Bolt are remaining vigilant in managing financial risks, including market, credit, and liquidity risks. The company’s financial health is tied to its ability to maintain sufficient liquidity and manage its financial liabilities effectively. Additionally, supply chain risks, particularly those linked to driver availability, are crucial as any sustained decrease in driver numbers could impact revenue.