Bolt says anti-competitive behaviour in the food delivery space led it to scrap its Bolt Food service, the Sunday Times reports.
The company says dominant competitors often have exclusive arrangements with restaurants, prohibiting them from delivering to customers through other food delivery services.
Andrew Ihsaan Gasnolar, head of public policy at Bolt, said the competition alluded to the issue in its market inquiry into online intermediary platforms.
“Our submission to the commission sought to highlight challenges in the food delivery space,” Sunday Times quoted Gasnolar as saying.
“The commission … found dominant players had arrangements that meant certain service providers, which account for the bulk of food delivery in the country, had exclusive arrangements with them.”
It instructed several companies, including Uber Eats, Mr D Food, and Bolt, to revise their business practices.
In its provisional report on the Online Platforms Market Inquiry, the Competition Commission recommended that food delivery services must end any incentives offered to restaurants to steer volumes their way.
It also found that food delivery apps used a business model with substantial promotions combined with high restaurant commission fees, resulting in hefty surcharges on menu items that aren’t always clear to customers.
“The inquiry provisionally recommends greater transparency on either the menu surcharge or the share taken by the delivery platforms,” it said.
Gasnolar said Bolt will focus on its short-trip and last-mile parcel delivery services following the scrapping of Bolt Food.
He said it will also introduce electric bike and scooter offerings to its platform.
“We had to make the very difficult decision over the past year of … closing the food delivery business in South Africa. So for the next month or so, we are going to be managing that arrangement with restaurants on our platform [so] that the off-boarding process is seamless,” he said.
Bolt confirmed that it was shutting down its food delivery service — Bolt Food — in South Africa in early November 2023.
“At this time, we have made the difficult decision to discontinue our food delivery operations in South Africa due to business reasons,” a Bolt spokesperson told MyBroadband.
“The decision to exit this market is necessary to streamline our resources and maximise our overall efficiency as a company.”
Bolt Food will stop taking customer orders in the country on 8 December 2023.
The ride-hailing company launched Bolt Food in South Africa, beginning with Cape Town, in April 2020.
It expanded to Johannesburg 18 months later after reaching 800 restaurants in Cape Town. It initially offered deliveries from 300 restaurant partners in Johannesburg.
In October 2021, James Townsend-Rose, Bold Food country manager, said the platform would expand to other South African cities within months, targeting Pretoria and Durban as its next service areas.
However, Bolt shifted its goals and told MyBroadband that it had big plans to build Bolt Food to a point where it is competitive with Mr D Food and Uber Eats.
This included expanding the service to all 23 cities and towns where its ride-hailing service was operating at the time.