The End of the Ride-Hailing Price Dumping Binge

As ride-hailing giants face mounting financial pressure, the era of artificially low fares is ending – forcing the industry to confront a new economic reality.

For over a decade, venture-funded ride-hailing firms have relied on a single, aggressive strategy: deploy vast amounts of investor capital to subsidise fares, artificially inflate driver earnings, and rapidly acquire market share. This approach allowed companies such as Uber and Bolt to upend local transport markets, setting pricing expectations that bore little resemblance to economic reality. 

But the landscape is shifting. With capital markets tightening and profitability becoming the key measure of success, the sustainability of this model is under increasing scrutiny. Uber has already embarked on a path of financial discipline, gradually reducing incentives to stabilise its balance sheet. Bolt, by contrast, remains heavily reliant on subsidisation – though its forthcoming IPO will almost certainly force it into a similar transition. 

A Financial Model Addicted to Subsidies 

The numbers lay bare the extent of Bolt’s dependency on subsidies. In 2023, the company reported €1.7 billion in revenue, yet €535.7 million (nearly a third) was allocated to rider and driver incentives. The previous year, subsidies were even higher at €537.9 million, despite total revenue being just €1.24 billion. This is not the profile of a business growing on strong fundamentals, but one that remains reliant on continuous financial injections to sustain user engagement. 

Malta: A Case Study in Subsidy Withdrawal 

The impact of this model is particularly visible in Malta, a microcosm of Bolt’s wider European strategy. For months, the company has subsidised up to 75% of completed rides, distorting pricing dynamics and exerting immense pressure on competitors. Last week, however, Bolt briefly scaled back discounts to 25%, prompting an immediate 30–40% surge in competitor ride volumes. This week, in an attempt to counteract the shift, it reversed course, increasing subsidies once again to cover 50% of the market – a clear indication of its ongoing struggle to maintain dominance without aggressive price manipulation. 

More significant than these short-term fluctuations is the broader trend taking shape. Each time Bolt pulls back on subsidies, the market reacts, allowing local operators such as eCabs Malta to reclaim ground. This is a live demonstration of what happens when ride-hailing giants are forced to compete under real financial constraints. For years, their capital war chest allowed them to dictate the terms of competition. Now, as the pressure to rein in losses grows, the inherent financial resilience of local operators – who have always been required to run commercially viable businesses – becomes increasingly relevant. 

Uber’s Rehabilitation, Bolt’s Impending Reckoning 

Uber, recognising the shifting economic climate, has taken steps to extricate itself from its reliance on subsidies. The transition has been gradual, but necessary. Growth has slowed, fare prices have adjusted upwards, and the company is now focused on building a sustainable profit model. 

Bolt, however, has yet to take the same corrective measures. The firm remains dependent on deep discounts to retain market share, delaying the inevitable reckoning that will come with its public listing. Once under the scrutiny of public investors, Bolt will face the same market pressures that forced Uber into financial sobriety. At that point, price cuts will no longer be a luxury but an unsustainable liability. 

A More Balanced Market on the Horizon

For the legacy taxi and private hire vehicle (PHV) operators who have endured more than a decade of artificial market distortions, the outlook is beginning to improve. With ride-hailing firms now under pressure to operate on commercially viable terms, competition is shifting back to factors such as service reliability, operational efficiency, and brand trust – areas where long-standing operators have inherent advantages. 

Moreover, these operators are no strangers to survival in tough conditions. The COVID-19 pandemic and years of relentless competition from global ride-hailing giants have forced them to become lean organisations – capable of running marathons with very limited oxygen levels. Their ability to operate efficiently, without the crutch of venture capital, means they are better equipped to compete in a world where price dumping is no longer a sustainable strategy. 

The coming years will mark a new phase in the ride-hailing industry. Those that can adapt to financial reality will survive. Those that cannot will face an unavoidable correction. The era of unchecked subsidies is ending, and with it, a more balanced and sustainable market is set to emerge. 

By Matthew Bezzina, eCabs Technologies’ CEO