Fast food and low pay? It’s all demand and supply for Bolt

After starting independent operations in Malta this year, the platform-work giant Bolt – famed for its on-demand taxi service and food courier provider – made several appointments to its on-the-ground leadership as it scaled up its expansion into Malta.

One of these was country manager Kamran Samadli, who from his top position can see before his eyes the controversy that certain aspects of the Bolt model has generated on the island.

Chiefly, rightful compensation to food couriers was finally cast in the harsh spotlight after Bolt couriers went on strike, amid claims that up to half of their earnings go to employment agencies – the middlemen recruiting so-called ‘third country nationals’ from Asia – while the food delivery platform itself kept lowering delivery rates.

MaltaToday sat down with Samadli to understand the company’s platform work model, how it prices its bonuses for couriers, and how Bolt Food’s role in the market will change in the years to come.

Platform work

It is no surprise that the overarching theme to Bolt Food’s operations is the crude force of demand and supply, with Bolt Food serving as a digital marketplace to bring vendors and customers together. “In general, Bolt Food and other delivery companies are just marketplaces where three sides meet,” Samadli says. “The restaurants will sell their goods, there are delivery partners who deliver this food, and there are the customers, who represent ‘demand’.”

But he argues that – and this is the fundamental attraction of the mobile app that represents the platform genesis – Bolt Food’s goal is ultimately to incentivise demand or supply in the marketplace as needed. That is, crucial to the model that Bolt has harnessed, is making consumers want more food delivery service. “It can come in the form of specific demand subsidies, or supply campaigns in the market. At the core of it really, it’s just supply and demand.”

Yet food delivery couriers tend to get the short end of the stick in this model, unions and social activists will argue. Their livelihoods rely solely on what the market forces provide – and Samadli is well aware of this. “In specific hours of the day there is so much demand that couriers can earn, I don’t know, like three times more than what they can earn during normal times. Some other times, for example when it’s the low season in the market, earnings go down.”

But this is the philosophy of Bolt Food: the free market is the most efficient system, and it should be allowed to take its course. The company’s only job is to incentivise demand or supply when necessary. “It’s an open platform. They can come in and go out whenever anyone wants. We don’t exercise any control whatsoever over our partners. They can work for multiple platforms, they can join us for a few minutes to multiple hours. We give them maximum opportunity to manage their own schedules.”

Recruitment agencies

Certain recruitment agencies providing couriers to Bolt Food in Malta are known to take hefty pay cuts from their couriers’ weekly wages, who are also subjected to weekly pay targets of around €500 to €600 a week – a mission that involves taking up as many delivery jobs as possible, with scant regard for occupational health or safety.

These agencies are separate companies, with their own set of rules, and it is not up to Bolt Food to impose any requirements on them. The company’s only requirement for these agencies is that they must comply with the relevant local laws. Bolt reviews each employment agency at the start of their business relationship, assessing employment contracts and other documentation to make sure that the agency is compliant with local employment laws and regulations.

Samadli says there have been situations in the past where the behaviour of some fleet companies had been detrimental to its couriers. In such case, Bolt Food listens to the affected couriers to find a solution. “If it doesn’t work, we decide to part our ways.”

In general, Samadli says Bolt Food does not endorse situations where couriers work for them through such agencies. But he resigns himself by saying it is up to the companies to operate as they please, so long as it doesn’t harm the wider food delivery ecosystem. “At the end of the day, we cannot really go to agencies and tell them to charge couriers one amount instead of another, but if we see that it hurts their employees and our general ecosystem, we start to provide suggestions.”

But it is this model of deregulation that underpins the profit of digital platform providers. Bolt does not recruit the food couriers, which allows the development of its product – the creation of demand, the marketing of food delivery – separate if not totally apart from the wellbeing of workers, who fall under the responsibility of unrelated companies.

Samadli says the suggestions Bolt Food could tender to the recruiters might amount to questions of efficiency: “For example, if an agency continues doing this behaviour, such as charging this amount or this percentage, you will not have any couriers left because they’ll just go to another agency,” he says, showing that ultimately it is couriers who negotiate their destiny, individually.

In more radical cases, Samadli says the company has been ready to cut off business operations with certain agencies. “It rarely happens. Everyone wants to continue their business. Most of the time we come to an alignment.”

The algorithm

The Bolt Food app works by matching delivery couriers closest to the restaurant receiving orders. No great algorithms at work – just a geographical matching that also defines which couriers could be able to make the most frequent kind of deliveries and in which area. “We don’t have any specific algorithm that defines who gets what, except for one criterion, which is that the order from the restaurant always goes to the courier that is nearest to the restaurant,” Samadli says.

A more recent addition to the algorithm was to introduce more group orders for couriers, especially in peak hours, allowing couriers to accept multiple orders from different restaurants at the same time. Couriers located further away from a restaurant will be given an order to deliver depending on the cooking time. If a courier is 10 minutes away from the restaurant, and the order is expected to be ready in 10 minutes, there is a good chance that this courier will be given the order instead of anyone nearer.

Samadli adds that Bolt Food also has a compensation scheme whereby couriers get paid for waiting times. “There is an automated process in place where, for example, a courier waits for a specific number of minutes, and the system automatically adds additional compensation to the couriers’ earning balance,” a process he says, that used to be carried out manually, but only became automatic recently to avoid human error in the way couriers get paid.

Bonus payments

Payment per delivery varies, depending on the time of the delivery and the distance covered to deliver the food. Couriers get paid 40c for each kilometre travelled, while the bonus for carrying out a delivery ranges from 25c at lunchtime hours, to €1.60 between 7pm and 9pm.

Beyond this payment structure, couriers receive bonus payments depending on the time of the delivery. At off-peak hours, this bonus can be as low as 25c, while peak hours offer delivery bonuses of around €1.60.

Fair compensation has become a strong point of contention for couriers in Malta. Bonus payments change every day, depending on demand and supply, but couriers have felt an average decline in these bonus payments in recent months. On peak hours, delivery bonuses can climb upwards of €2, dipping below 50c on off-peak days like Saturday.

Samadli is straightforward in saying that these bonuses are actually “market-correcting mechanisms” that are used to incentivise couriers to carry out more orders when demand is at its highest, outstripping the supply of couriers available.

Once again, it is left to the courier – practically self-employed yet severed from the forces that warrant his service – to decide whether to carry out more deliveries to obtain the bonuses to supplement the travel-delivery pay.

By way of example, Samadli explains that, hypothetically, should there be 10 online couriers – the supply – effecting 10 individual deliveries – the demand – then the market is at equilibrium, and there’s no need for a bonus to incentivise anyone. But if there are 50 deliveries to be made at peak hours, with just 10 couriers to carry them out, a bonus is needed to have more couriers available to carry out the deliveries. “When we see that supply and demand are balanced, we don’t need to introduce this bonus because everything basically runs itself in a way that it’s efficient. When there is no demand but more supply, it could play against the market dynamics,” he said.

Whether this means that an over-supply of couriers pushes down the bonus rate, is left up to the ‘marketplace’ to sort out. Bolt Food’s is a hands-off approach to the courier system: the digital platform will not stop people from entering the courier game, even if there is excess supply to demand. “We cannot impose any limitations and controls on the supply side, so it’s better for us to focus our energy towards increasing the demand as this creates a more competitive market.”

Courier strike

But when couriers went on strike a few weeks ago, their key demand was simple: increase the bonus payments. At first, Bolt Food promised to “optimise its pricing mechanism” in reaction to the strike. Eventually, it said that it will not change its earnings formula, including its bonus mechanisms.

The only thing Bolt Food committed itself to doing is to give more opportunities to couriers to increase their overall earnings, such as by introducing grouped orders: read, deliver more. This, Samadli explains, is what was meant by “optimising the pricing mechanism”.

Indeed, Samadli makes it very clear that Bolt Food will not raise these bonus payments for couriers. The only thing that would increase the bonus payments is higher demand – a crude reality of the food delivery phenomenon in Malta. Only with more people choosing not to cook (cheaper food) at home, and being enticed to have restaurant food brought to their home at an efficient time (delivery times under Bolt have obliterated past practices where pizza places would prepare a batch of orders before delivering them at once),

“It’s a matter of reactionary changes. For example, when there was a lot of rain in Malta, we knew that it was hard for our courier partners to deliver the food, and therefore we increased the earnings for the extra effort they were showing,” Samadli says an observation that brings to mind the viral videos of couriers on scooters wading through heavily flooded streets in Malta, trying to deliver their food orders despite the storm.

And Samadli admits that this is a hard reality of the courier experience. These delivery workers were suddenly incentivised to power through dangerous weather conditions in the name of demand and supply.

Samadli says that in such cases, if a restaurant is located far away from an urban centre, it can incur a temporary stop on deliveries during storms to avoid putting couriers in unnecessary danger. The delivery radius shrinks during bad weather to avoid long travelling distances.

Samadli insists that a delivery bonus during a thunderstorm is not intended on making anyone financially better or worse. “We know that, even if we suggest otherwise, there will be courier partners delivering anyways. We just want to make sure that the extra effort is appreciated.”

But Samadli says Bolt Food has not yet sat down with any individual couriers on the matter yet, and imply extends an invitiation to disillusioned couriers to send an email to the company’s public address at [email protected].

Threats of another strike do not even appear to phase Samadli. “We are already well aware of that some changes are causing some unhappiness from the supply perspective, and we are basically open to discuss this.”

Samadli even says that no unions have approached Bolt Food about its employment model, and that employment authorities have reached out to inquire about working conditions and the platform’s operations.

Recently, the Malta Employers’ Association suggested that food couriers should be afforded more protection through a wage regulation order. It said many third country nationals operating in this sector were doing so in an unregulated manner after government changed the rules to allow non-EU nationals to become self-employed during the pandemic.

Samadli says the company is open to cooperating with authorities in developing policies to regulate the industry. “This is an industry that changes fast, and maybe authorities need some support in understanding where it’s going,” he says. “We are ready to sit around the table to discuss and provide our perspective, even share some data, to support an understanding of the market.”

The simple fact of the Bolt success lies in the revolutionary power of the smartphone with its advanced technology apps allowing consumers to simply order anything they wish in minutes. Clearly, digital platform companies freed from the burden of also employing the couriers that effect deliveries, can easily concentrate on making consumers ‘need’ their apps even more.

And Malta is an important market for Bolt, with Samadli saying that in the last years “a huge acceleration” took place in delivery services. The company wants to extend its food delivery, ride-hailing, and e-scooter services, giving consumers more affordable prices and improved services. The main priority in the next years is to keep bringing on as many restaurants and service providers to the platform.

“We are also constantly looking into some other possible opportunities where we can maybe partner up with some restaurants or with some companies to deliver even higher value proposition – not necessarily in the delivery sector, although it will be one of our high priorities, but it can be like joint partnership with many companies to give benefits, perks or even better prices for customers as well as our partners.”

“We have a good number of restaurants in Malta on the platform, but it’s not enough. Ideally, this platform should be an extension of real life – everyone should be there.”