Liz Gannes

Recent Posts by Liz Gannes

Europe’s BlaBlaCar Has Created the Purest Version of the Sharing Economy So Far — And It’s Working

BlaBlaCar, the Paris-based long-distance ride-sharing marketplace, now has a million active monthly users — people who either drive their personal cars or grab extra spots en route to another European city. Five million have registered for the service in total.

The company has evolved quite differently from other efforts in the space, particularly in the U.S., where, for instance, Lyft ditched its original business model of long-distance ride-sharing (called Zimride) in favor of what has basically become a more flexible taxi equivalent within cities.

In Europe, the high price of fuel and frequency of travel between cities have certainly helped BlaBlaCar, as well as competitor But BlaBlaCar suddenly reached critical mass in many European countries earlier this year, according to co-founder and COO Nicolas Brusson.

The average BlaBlaCar car occupancy is 2.8 people (compared to a European average of 1.7 people per car), the average length of a journey is 213 miles, and the average price is 17 euros. Users plan ahead, but not much; drivers generally post about five days beforehand, and riders book a day or so in advance.

What’s interesting about the BlaBlaCar model is that it specifically discourages drivers from making a profit. The company posts a recommended amount each passenger should pay the driver, based on fuel and usage for their car and trip distance. It caps the amount so drivers can recoup their expenses with a full car, but not more. BlaBlaCar takes an 11 percent cut.

The idea is for people to drive where they normally would, while offsetting their costs. Meanwhile, BlaBlaCar passengers pay 79 percent less than a rail ticket for the same trip, on average, according to company stats. (The name BlaBlaCar comes from a designation in users’ profile of how talkative they are: “Bla,” “BlaBla” or “BlaBlaBla.” Most everyone says they’re “BlaBla.”)

At our meeting in San Francisco, the obvious question was, will BlaBlaCar come to the U.S. next? Quite possibly, Brusson indicated. There was also perhaps another reason to come out to California. The company last raised funding in 2011 — $10 million led by Accel Partners — which predated this big growth spurt. Here’s a video interview with Brusson from the cafe where we met:

On a broader level, the sharing economy is an evolving concept, but usually it’s about redistributing underused assets — like spare bedrooms (Airbnb), seats in cars (Lyft), used clothing (Thredup) and extra time in the day (TaskRabbit) — by making them available for other people to easily book with a mobile app.

Quite often, the sellers in these marketplaces end up going into business for themselves. They like contributing to the larger community — but they also do it to make good money. They roam the streets waiting for a hail, they string together odd jobs, they even rent extra apartments once they figure out the system.

There’s a massive new Lyft driver-recruitment billboard in San Francisco that says “nine to five.” That is: Ditch the day job for a gig that’s more flexible.

But it’s tricky. These companies keep running into regulatory scuffles because their users don’t have licenses and certifications and permissions, and incumbents don’t like the competition. The best-case scenario for many sharing economy startups is for new legislation that would carve out space for these so-called “micro-entrepreneurs” to operate legally, as California has done for Lyft, Sidecar and UberX drivers and Airbnb is hoping for its hosts in New York.

BlaBlaCar is very different, according to Brusson. “We try to be careful so that drivers don’t make a profit … they offset a cost,” he said. “We don’t recruit drivers, we don’t hire drivers. It’s real people that drive between these routes.”

Said Brusson, “We want to make sure we don’t get into creating a complete new business around carrying people between cities, which would be illegal, and you would get into all sorts of regulation issues, but also would sort of break the spirit of sharing.”

Okay, but doesn’t that mean the business opportunity is smaller for BlaBlaCar, versus these companies that are reshaping existing industries and rising on the backs of their micro-entrepreneurs?

No, not at all, according to Brusson, who thinks that there’s plenty of opportunity to shake up the market for transportation more politely — because it’s so big.

“It’s true in Europe, and the U.S., as well, if you think of the biggest passenger capacity we have in all these countries — they’re not in trains, planes or buses, they’re just in cars,” he said. “It’s all these empty seats driving around the country, the city. We enable the private car to almost become public.”

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