The Bolt app has raised its prices in London by 10 per cent, bringing it in line with rival Uber, as stricter regulations and a shortage of drivers are driving costs higher.
Uber raised its own prices to the same level as last November appealed to more managers as gig economy workers switched to competitors, including food delivery services and Amazon, or reduced their hours.
A Supreme Court verdict in December, that UK private rental taxi operators should enter into a contract with customers when accepting bookings has caused problems for gig companies, which have previously insisted they are merely platforms connecting drivers and passengers.
Uber has since warned that the decision could increase the cost of rides by 20 percent, as it would have to charge customers VAT as a transport provider instead of as an agent.
But the ruling only affects private rental companies in the capital and Bolt said its price increase would only apply to London.
A separate ruling last year found that Uber managers must be considered workers, rather than contractors. The court argued that if the company sets its own prices, managers should be considered employees.
Since November, Bolt has allowed some drivers to set their own rates for travel. Bolt said at the time it would reduce waiting times and driver cancellations, following the increase in demand last winter.
But a spokesman said it had “interrupted” the launch while the company was reviewing its operating model, following the Supreme Court ruling.
Bolt announced on Tuesday that it had raised € 628 million, led in a new round of funding by Sequoia Capital and Fidelity, which valued the company at € 7.4 billion, compared to € 4.2 billion in August.
Its CEO, Markus Villig, has argued he wants to become a “super application” offering multiple services on one platform. In Europe, Bolt has expanded to deliver groceries and mobility, such as e-scooters.
Both markets are full of competitors in the UK and there have been several recent acquisitions of smaller companies as the sectors consolidate.