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Bolt, a ride-hailing service, expands into Italy to serve a market that is underserved

Bolt, a ride-hailing app, launched its operations in Milan in the first phase of a campaign aimed at shaking up the Italian transport market. According to Bolt's CEO the Italian market is still largely?underserved?despite the presence and popularity of Uber in the U.S.

Markus Villig, the founder and CEO of Estonia's Bolt, stated that Bolt would work with hundreds drivers in Milan who will either be official taxi drivers or private hire car chauffeurs. The company expects to provide millions of rides within its first year.

The market in Italy has just begun. "We have a long term view," Villig stated in an interview. He added that Bolt plans to expand later in Italy in order to tap into the huge tourism industry.

He said, "We can provide better products and services to our customers. We are also here to help drivers earn more money."

Bolt is now active in 26 of the 27 countries that make up the European Union.

DESPITE TRANSPORT SHORTAGE, APPS FACES PUSHBACK IN ITALY

Italy's ride hailing sector is still governed under a framework from 1992 that separates taxis with a license and chauffeur-driven vehicles. Local authorities also tightly control the number of taxi permits.

Italian antitrust authorities and critics say that the system is responsible for chronic shortages in major cities and long wait times, which regularly leave tourists and residents stranded.

Uber has been operating in Italy for more than a decade. However, Italy does not permit ride-hailing companies that use drivers who do not have commercial licenses. Taxi unions have been very resistant to any reforms.

Milan, with a population of approximately 3 million in the metro area, approved 450 new taxi licences last summer, the first major expansion for the city since 2003. At the time, the city had 4,853 active permits.

Villig stated that there aren't enough drivers in Italy to drive the demand. The market in Italy would grow if regulators opened the door to new suppliers. It would be different."

He has said that he doesn't expect Bolt to be profitable in the next five years.

The taxi industry in Italy has been at a standstill for years. Attempts to expand their services have repeatedly led to strikes and protests on the streets by drivers.

App-based platforms are still seen as a danger by many taxi drivers in a sector based on fixed municipal rates and limited licenses. This is one of the most politically sensitive battlegrounds for Italian transport.

Three Italian taxi drivers were told by their unions that the arrival another ride-hailing app would cause a backlash and protests.

One driver explained, "We use a meter with rates set by the municipality as this is a service provided to the public." Instead, apps set their prices, take commissions, and pay drivers several weeks later. This is not fair competition." Reporting by Inti and Mirko Landauro; editing by Joe Bavier

(source: Reuters)