Uber’s European rival isn’t making layoffs, even after sales plummeted 75%

European Uber rival Bolt says it isn’t laying off staff despite the impact of the coronavirus pandemic, highlighting a different direction to ride-hailing giants stateside.

The Estonia-based firm has, like other players, been harshly hit by coronavirus lockdowns across Europe, with sales plummeting 75% in mid-March compared to average revenues in February. The company says bookings in Slovakia collapsed 100% after the country banned taxi services in March. The ban has since been lifted.

That mirrors a similar trend affecting competitors. Uber’s ride-hailing business suffered an 80% year-on-year drop in bookings in April, while Lyft experienced a 75% fall in rides that month. Both companies have taken deep cost-cutting measures, with Uber laying off 3,700 workers and Lyft letting go 982 employees.

Markus Villig, Bolt’s CEO and co-founder, said the firm has been more frugal than some of its competitors, and therefore hasn’t had to make any layoffs. Bolt is one of Uber’s main challengers in Europe — others include BlaBlaCar and Kapten.

“Luckily we come from a background of being very frugal from the get go,” Villig told CNBC said in an interview last week. “Our approach has always been to build a lean, cost-efficient organization.”

The company says it has furloughed some contractors for a “limited” amount of time but expects them to return to work once the business recovers.

Bolt, which rebranded from Taxify last year, has increased investing into segments such as scooter-sharing and food delivery. It recently unveiled a new electric scooter and announced an expansion of the service into 45 more cities. Villig said the strategy was working in Bolt’s favor as lockdown restrictions are preventing people from being able to move around freely.

“We’re not looking at doing any layoffs,” he said. “The focus is on adjusting the business from ride-hailing to now work with scooters and food, in these times when people are just not able to move or don’t prefer ride-hailing.”

Still, scooter-sharing has proven to be a tough business to sell to consumers during a pandemic. U.S. start-ups Bird and Lime have had to make job cuts in recent weeks, while Lime also got a funding boost from Uber and other investors to help it survive the pandemic. Villig admitted the margins from scooters are “tiny,” but added that he believes it’s a “great complimentary service” to taxi hailing.

While he couldn’t rule out the possibility of layoffs further down the line, Bolt’s chief said he’s relatively optimistic about the outlook for ride-sharing as several European countries are gradually lifting their lockdowns. Germany, France and Italy are among the nations that have already begun a gradual reopening of their economies, while the U.K. has outlined its plan to ease lockdown measures.

The company told CNBC in December that it had broken even or reached profitability in two-thirds of the markets it operates in. But, the pandemic has resulted in a “big reset” for transportation start-ups, according to Bolt’s CEO.

“It’s hard to expect what’s going to happen in the next six months, but we were clearly on a path to be fully profitable earlier this year, and we will now continue on that,” he said. The group lost 61 million euros ($66 million) on revenues of about 80 million euros in 2018.

After securing 50 million euros in debt financing from the European Investment Bank, Bolt is now aiming to raise another round of funds later this year. Villig said the firm is “constantly” talking with its investors — which include German automaker Daimler and Chinese ride-hailer Didi Chuxing — but added that Covid-19 has pushed back its fundraising efforts. The company was last valued by investors at $1 billion, giving it “unicorn” status.