Uber pushed Uklon out of the Azerbaijani market: Can Bolt withstand the pressure?

Taxi aggregators in Baku are currently experiencing a period of turbulence, and amid these changes, one clear leader has emerged — Uber.

Following recent legislative amendments in Azerbaijan concerning passenger transportation, the city’s taxi market has undergone a significant transformation. The new regulations have tightened requirements for drivers and vehicles, compelling companies to rethink their strategies. Despite the challenges, Uber has managed not only to strengthen its position but also to expand its influence, while its competitors have faced difficulties and started losing market share.

Legislative changes: Barriers for drivers and aggregators

Recent amendments to the legislation have imposed stricter requirements on taxi drivers. Drivers are now required to pass an exam and obtain a special certificate to operate legally. This rule has posed a serious obstacle for those who previously took up taxi driving as a side job without the necessary qualifications. Previously, drivers could easily combine their main job with part-time rides, but now, in order to meet the new standards, many have been forced out of the market. This change has particularly affected those for whom driving was not their primary source of income.

Additionally, a new regulation by local authorities has banned the use of vehicles over 15 years old for passenger transport. This decision dealt a significant blow, reducing the number of available taxis in the city. Consequently, many drivers whose cars did not meet the standards had to look for alternative employment, leading to a sharp decrease in the number of vehicles on Baku’s roads. According to the Ministry of Digital Development and Transport, the number of taxis in Baku has halved, with only 35,000 vehicles currently in operation . Overall, these changes have impacted not only the drivers but also the aggregators themselves, who have had to reevaluate their approach to the market.

Uber resilience: Stability amid crisis

In light of these changes, the taxi market has been visibly reshaped. Many aggregators have had to rethink their business models, adapt to the new requirements, and some have even failed to meet the challenges. Uber, despite the difficulties, has demonstrated remarkable resilience and managed to maintain its presence in the market. Moreover, thanks to its effective adaptation and flexible system, Uber has managed to solidify its position, even as competitors began losing ground.

The situation has been quite the opposite for Uklon, a company that entered the Azerbaijani market last year and initially made a significant impression. However, within just a few months, its operations were scaled back. Fierce competition from industry giants like Uber and Bolt proved to be an insurmountable barrier for Uklon. The company’s debut in May last year was seen as a sign of increased competition in the market, but its swift exit underscored the strength of the market leaders.

Bolt under pressure: Slow decline

While Uber has been able to take advantage of the situation and even benefit from the new rules, another popular aggregator, Bolt, has faced a series of problems. One of the main issues has been drivers' attitudes towards payment methods. Drivers are increasingly rejecting orders if customers prefer to pay by card. Unlike Uber, which accepts all forms of payment, Bolt has encountered problems related to cashing out funds and financial difficulties that arise when drivers try to withdraw their earnings. This has created additional tension and reduced the quality of service.

Another downside for Bolt is the chronic shortage of drivers. More and more clients are complaining about long waits or the inability to find a taxi through the app. This is a clear sign that the number of drivers working with this aggregator is dwindling. The reasons for this decline may vary, from difficulties in obtaining the necessary certificates to issues with working conditions within the company itself. This has led drivers to seek alternative ways to earn a living with competitors.

Uber's dominance strategy: A victory, but not the final word

Today, Uber is the undisputed leader in the Baku market. After pushing out Uklon, it seems likely that Bolt will be the next competitor to face challenges, as it is currently maintaining a presence but is clearly weakening. Despite the difficulties, Uber has been able to adapt to the new conditions and even leverage the situation to its advantage, offering customers consistent service and more flexible terms for drivers. Its universal payment system and well-organized logistics have helped the company avoid the difficulties faced by its competitors.

What’s next for the market?

The question remains whether Bolt will be able to hold its position or will follow Uklon's path, fully ceding the market to Uber. The situation in Baku’s taxi market shows that aggregators can no longer rely on old strategies; they are forced to seek new approaches and adapt to changing conditions. In this context, Uber sets an example of successful management in a crisis, while its competitors slowly lose their footing.

Will Bolt have a chance at recovery? Could a new player attempt to shake up the market dynamics? These questions remain open. For now, one thing is clear: Uber has demonstrated the strength that other aggregators lacked and continues to dominate, showing an example of successful adaptation to challenging conditions.

News.Az