European ride-hailing firm Bolt has launched a strong critique against potential government plans to impose a 20% VAT on private hire journeys, labelling the proposed 'taxi tax' as incredibly damaging to the industry.
Bolt's Warning Over 'Punitive' Taxi Tax
The Chancellor is reportedly considering the introduction of a 20% VAT on all private hire fares in the upcoming autumn Budget. Bolt, a major rival to Uber, has warned that this tax change would disproportionately impact shift-based workers and vulnerable passengers who rely on taxi services.
Kimberly Hurd, Bolt's UK senior manager, told the PA news agency: "If the Government does decide to enable a 20% VAT on fares, it'd be incredibly harmful and destabilising to the industry." She emphasised that the direct increase in fare costs would hurt both passengers and drivers' livelihoods, calling the proposal 'punitive'.
New 'Bolt Flex' Feature Gives Drivers Control
Amid these concerns, Bolt is trialling a new service called 'Bolt Flex', which it claims is an industry first. This model allows drivers operating outside of London to set their own trip prices and negotiate with passengers.
The system works on a flat commission basis and is designed to meet driver demands for greater control over their earnings, especially for longer or less desirable trips. Passengers can also bid a higher price if they are willing to pay more for a journey, making it more likely a driver will accept their request.
Ms Hurd stated that the market self-regulates to prevent excessive pricing. Early testing of the model in nine UK cities, including Sheffield, Newcastle, and Cardiff, has yielded positive results for drivers.
Trial Results Show Driver Earnings Boost
According to Bolt's data from the ongoing trial, the new flexible pricing model is delivering significant benefits for its drivers. The company reports that drivers are earning over 25% more on the Bolt Flex platform and are seeing a 14% increase in orders per hour.
"We're seeing very minimal price increases – we're not seeing decreases," Ms Hurd told PA, adding that both passengers and drivers are setting prices slightly higher. The company is looking to roll out the feature across the UK and potentially internationally, though it will not be available in London due to different regulations set by Transport for London.
