Ride-sharing app Bolt has launched a price bidding trial in Newcastle, allowing drivers to set fares and negotiate with passengers, as the company criticises potential government plans to impose a 20% VAT on private hire fares. The trial, called Bolt Flex, is described by the company as the first of its kind in the industry.
Bolt's UK senior manager, Kimberly Hurd, said the proposed VAT would be 'incredibly harmful and destabilising to the industry', disproportionately affecting shift-based workers and vulnerable people who rely on taxi services. Chancellor Rachel Reeves is reportedly considering announcing the tax in the autumn Budget on Wednesday.
Currently, many taxi drivers do not charge VAT on journeys because they are self-employed and fall below the yearly earnings threshold. Hurd warned that the tax would increase costs for passengers and hurt drivers' livelihoods.
The Bolt Flex feature allows drivers to set prices and negotiate them with passengers, with a flat commission per trip. The company says it meets driver demands for more control over pricing, particularly for longer or more difficult journeys. Passengers willing to pay more can bid a higher price, which is more likely to be accepted.
Bolt claims the market self-regulates to prevent excessive prices, and early results show drivers earning over 25% more on Flex, with 14% more orders per hour. The trial is currently active in nine UK cities, including Sheffield and Cardiff, but not London due to Transport for London regulations. Bolt plans to roll out the feature across the UK and potentially internationally.
