Issue link: https://maltatoday.uberflip.com/i/1524836
10 maltatoday | SUNDAY • 4 AUGUST 2024 ANALYSIS CONTINUED FROM PAGE 9 It was not until January 2020 that its first major competitor emerged on the scene – Bolt Food. And it only took a couple of months afterwards for Wolt, a Finnish de- livery app, to launch on the islands as well. From the three companies, only Bolt and Wolt are still offering food delivery servic- es after Time to Eat went dark in January 2022. Meanwhile in the taxi industry, eCabs was far from the only taxi company in the market, but it enjoyed a hugely dominant position regardless. It wasn't until Taxify came onto the scene in 2017, later rebrand- ing to Bolt, that eCabs met its match. Other ride-hailing companies tried to shake up the market over the years, but they left the sector quicker than they entered it. Uber eventually found its way to Malta in 2022, with its global dominance giving them a competitive edge and helping them find roots in the market. There seems to have been a brief overlap in ownership between Bolt Food and Time to Eat. Before Bolt pursued independent operations in Malta, it was working in part- nership with TXF Tech. When it was first set up in 2019, the company's directors were Jacob Frank Appel, Klas Martin Johansson and John Sebastian Ripard. At around the same time, the company behind the Time to Eat brand, Food Solutions Limited, un- derwent a change in ownership that saw most of its shares transferred to Wugang Limited. This is in turn owned by a Cyp- riot holding company owned by the same Klas Martin Johansson at TXF Tech. Jacob Frank Appel was also one of the founders of Time to Eat but stepped down as company secretary in November 2017. He remains an owner of Food Solutions Limited through a UK holding company. Recipes for success Food delivery and taxi services are two unique sectors, but both are underpinned by mobility and gig work. New technolo- gies have allowed companies in these sec- tors to develop digital platforms that serve as an algorithm-driven 'marketplace', con- necting drivers with customers, or couriers to restaurants and consumers. Meanwhile, the gig work model of employment allowed the same companies to take a hands-off ap- proach to the way drivers and couriers want to schedule their work hours. ' If a digital platform and a gig work mod- el are the ingredients for mobility success, then what does the recipe call for? Whether it's in Malta or abroad, these mobility com- panies penetrate the market in a similar way. First, you stun local regulators. When you have the newest technology and can exploit any loopholes in the transport regulatory framework, you're likely to go unnoticed at first. Second, you start enticing self-employed drivers and couriers with attractive com- mission rates and a "be your own boss" at- titude. Third, you focus on the consumer market. You've already got the manpower you need to run your business, and now you need to attract the customers by pouring money in- to promotions, referrals, and free rides. This can only be made possible financially by exploiting loopholes, naturally-occurring when a new technology goes mainstream, in the fiscal or employment rules so that you can avoid paying VAT, social security contributions or corporate tax. Running a mobility company has all sorts of expenses, so you need to shave off as many costs as possible to retain a competitive advantage. If all goes well, your company can estab- lish itself as a dominant market player, and eventually push prices and commission rates up to generate a healthy profit. Bad apples When you're operating a mobility plat- form, you need to ensure that you always have enough manpower on hand to reach consumer demand. However, if you're opt- ing for a gig work model, you might not always have enough drivers or couriers on hand, especially during peak months. This is where recruitment companies, or fleet operators, come in handy. Back in 2021, MaltaToday revealed that Malta's leading food delivery platforms were relying on recruitment agencies to supply couriers. In turn, these agencies were withholding 50% of couriers' pay, and often charging recruitment fees in the thousands to third-country nationals looking for a job in Europe. If a Maltese courier with Bolt or Wolt would rake in €5.35 for a single deliv- ery, a courier employed through a recruit- ment agency would make just €2.70 for the same order. These recruitment agencies helped solve the foreign labour issue for platform com- panies. In Malta, a third-country national cannot register as a self-employed work- er with a company. Instead, recruitment agencies serve as the 'middle-man', offering a legal pathway into Malta to eventually work, de-facto, as a self-employed driver. Everyone becomes a winner – the foreign national gets a job in Malta, the recruitment agency gets a generous cut from their sala- ry, and the platform company doesn't have to worry about its labour supply. A lemon to a knife fight Recruitment agencies were not a new phenomenon at the time, but the laws regu- lating them were outdated and unenforced. Suddenly, regulators across several govern- ment agencies had to come to terms with the new practices in the market, what was legal and less so, and introduce a clearer set of procedures to standardise the conditions of employment agencies. This process was far from quick. After MaltaToday's 2021 report on recruitment agencies, Prime Minister Robert Abela said that his government will act against these illegal work practices. It took 21 months for the government to introduce regulations on platform work, and another year after that to regulate recruitment agencies spe- Regulating the jungle: A cabs