BlaBlaCar revs up without Uber-style rows
French firm offers car-sharing between cities and is valued at €1bn
BlaBlaCar has 20 million users across 19 countries.
Meet Europe’s latest ‘unicorn’ – the long-distance car-pooling firm that is shaking up inter-city travel across the world.
If you feel like chatting while you travel, click on the BlaBlaBla button. If you prefer snoozing or silent contemplation, click on the single Bla tab. That’s just one of the choices the long-distance car-pooling start-up offers the 20 million people who now use it in 19 countries across the globe.
BlaBlaCar has managed to avoid the fierce controversy – and negative headlines – that Uber has attracted as it grew from an idea in a high-flying physics graduate’s head to become one of Europe’s rare “unicorns”, a term used to describe private tech start-ups valued at over $1 billion.
That is because the French firm’s business model is fundamentally different to Uber’s. Both firms allow people to make make money with their cars. But BlaBlaCar hooks up people who are travelling between cities, not within a city as does Uber, the scourge of taxi-drivers across the world.
BlaBlaCar, whose average trip is 320 kilometres, is instead undercutting trains and inter-city buses and is proving wildly popular among young people and pensioners who have time but limited cash on their hands. And while Uber has fallen foul of regulatory authorities and has sparked ire, and sometimes violence, from the taxi-drivers whose business it is competing for, BlaBlaCar has so far managed to steer clear of collision with regulators.
The reason is that its drivers are allowed only to defray their fuel and road toll costs, not make a profit. The strategy also means that standard insurance policies are enough to cover both drivers and passengers. “Our drivers don’t make any profit at all,” said Fréderic Mazzella, the 39-year-old co-founder of the firm.
Ride-sharing schemes have been around in various forms for many years, but the advent of the smartphone has now made them accessible to the masses.
BlaBlaCar’s app is simplicity itself. After signing up, would-be passengers or drivers type in their destination and choose a ride from among those offered. They then contact each other and agree on a pick-up point.
On Monday, there were, for example, dozens of rides on offer from Paris to the city of Nantes on the Atlantic coast, with the first leaving at 3.30 am and the last one just before midnight. The cost for the three and a half hour trip is €24 , with BlaBlaCar taking around a 10 per cent cut from that.
The same trip on a TGV high-speed train varies between €65 and €80 and takes just over two hours.
Prospective BlaBlaCar travellers can see what type of car they would get, whether they can smoke during the trip, if they want the radio on or off, and they can choose how much “bla bla” they would like with the driver or other passengers. And, crucially, they can see what rating the driver has got from previous passengers.
Amélie, one driver offering seats in her car for the trip to Nantes, scored 4.6 out of five stars. She has garnered 47 positive reviews from passengers who commented on everything from her driving style – “impeccable” – to her apparently warm personality – “convivial” – to the quality of her conversation –“very enriching.”
As with AirBnB another company in the vanguard of the so-called sharing economy that enables people to take advantage of assets other people aren’t fully using - building a “community” of users is central to BlaBlaCar’s success.
The most frequent users of the service, who also need to get high approval ratings, are bestowed with the title of “ambassador” and some of them get their framed photograph hung on a wall of the company’s headquarters in the 9th arrondissement of Paris.
It was in the “BlaBla Bistro” there that Fréderic Mazzella recounted to The Irish Times the oft-told tale – the stuff of startup lore – of how he hatched the idea for the company.
It was December 24th, 2003 and Mr Mazzella was trying to get from Paris to the Vendée region of western France to spend Christmas with his family. The trains were booked out and he had to cajole his sister into driving the 500 kilometres to the capital to pick him up and then drive back again.
“The motorway goes the same way as the trains and I could see the trains were full with no seats left and the cars were empty. I thought, ‘oh my God, there were seats to go to the Vendée but not on trains, in cars’,” he said.
An accomplished pianist, Mr Mazzella ditched notions of making a career in music and instead studied physics before doing a masters in computer science in Stanford University in California which he funded by doing research work for NASA.
He set up his ride-sharing service with two co-founders, Nicolas Brusson and Francis Nappez, a couple of years after his Christmas 2003 epiphany. He said he struggled for years to find the right business model, all the while trying to ignore the legions of “It will never work” doomsayers before hitting on what looks like the winning formula.
That is a formula that has convinced investors, who in September stumped up an extra $200 million in funding for the firm, bringing BlaBlaCar’s market evaluation to $1.6 billion.
“It’s always been an exponential curve, but when you go from 10,000 to 20,000 members, nobody cares,” Mr Mazzella said. “When you go from 10 million to 20 million, people begin to look at it and say, ‘Wow!’.”
The company, after changing its name from covoiturage.com (carpooling.com), expanded rapidly by buying competitors such as Germany’s Carpooling.com and launching in emerging markets such as India.It also operates in Spain, Russia, Mexico, Turkey, and the UK.
It is profitable in France and in some other countries where it has had time to grow. But its main focus is on building a global brand, rather than on profitability.
The firm currently has no plans to launch in the United States, where much lower fuel costs make it less attractive for drivers to pool their vehicles. “It (the US) is not the low-hanging fruit for us,” Mr Mazzella said.
Next on its list is Brazil, where BlaBlaCar plans to begin operating later this year. But on the flip-chart with which the BlaBlaCar boss proudly displays the countries his firm has conquered, one small island on the western fringe of Europe is left blank.
“We don’t have any plans to launch in Ireland in the short term,” the firm said when asked why it had left the Emerald Isle out of its plans for world domination.
“At this stage we’ve decided to focus on countries with more than 10 million inhabitants.”