Bolt Food, the food delivery arm of ride-hailing firm Bolt, is preparing to wind down its operations in South Africa and Nigeria next month.
This, as competition intensifies in the online food delivery space.
In a statement sent to ITWeb, the company says it will officially pull the plug on its business in both regions on 7 December. It established operations in SA in June 2021, with Nigerian operations starting in October 2021.
“At this time, we have made the difficult decision to discontinue our food delivery operations in South Africa due to business reasons,” says a Bolt spokesperson.
“The decision to exit this market is necessary to streamline our resources and maximise our overall efficiency as a company. This means our users will not be able to place Bolt Food orders through our food app from 8 December.”
The company adds it remains fully committed to its other verticals in the two countries, and will continue to focus on delivering quality services to its customers.
Bolt Food SA is currently available in Cape Town and Johannesburg. In Nigeria, it is available in Lagos.
In August, Tafadzwa Samushonga, country manager for Bolt Food SA, told ITWeb the company was preparing to introduce Bolt Market on its platform, as it looked to transform into an online marketplace.
Food app trends
As Bolt Food SA exits, more players are entering the South African food delivery market, which is already dominated by two major players: Mr D Food and Uber Eats.
However, rising petrol prices, inflation and the economic downturn are some of the macro-economic factors negatively affecting the food delivery market.
SA’s online delivery sector is among the digital industries that have been under scrutiny since the introduction of the Competition Commission’s (CompCom’s) Online Platforms Market Inquiry in 2020.
Following several years of evidence-gathering, public hearings and in-camera hearings into online intermediation platforms, the CompCom found anti-competitive behaviour by Mr D Food and Uber Eats impedes competition within the industry.
The inquiry revealed the dominant food delivery platforms make it difficult for new and smaller local players to enter the industry. This is due to the incentives provided to their restaurant partners, as well as the nature of contractual agreements they sign with the food establishments.
It further found the leading food delivery apps’ business model is premised on high restaurant commission fees and substantial “promotions”, often resulting in customers paying hefty surcharges on meal prices.
The commission recommended greater transparency of either the menu surcharge for each restaurant on the platform relative to their take-away or dine-in menu, and/or the share of meal payment accruing to the delivery platform as opposed to the restaurant.
