In the United States, many people think of services like Uber and Lyft as “ridesharing apps,” but they’re not -- they simply connect riders and professional drivers.
In Europe, BlaBlaCar is trying to build an actual ridesharing network, using a very similar model to Airbnb. If someone is planning a trip from one city to another and they use BlaBlaCar, the service can link up people who want a ride and handle the payments to cover mileage and gas. BlaBlaCar takes about 10 percent of the fare.
Earlier this year, BlaBlaCar raised $100 million from investors including Accel Partners and Index Ventures, making it one of Europe’s largest startups. TechCrunch called the raise “the largest VC round in a French startup of all time” and speculated that the company could even become a "unicorn" -- the Silicon Valley term for a private technology company worth $1 billion.
International Business Times sat down with BlaBlaCar founder Nicolas Brusson in New York about BlaBlaCar's expanding to the United States, why it won’t face the same regulation problems as Uber and why most peer reviews aren’t actually peer reviews.
International Business Times: Uber is often called a ridesharing service in the United States. What’s the difference between BlaBlaCar and Uber?
Nicolas Brusson: To me the essence of ridesharing is people actually truly sharing a ride from point A to point B. When you take an Uber or Lyft today -- I'm going to the airport to fly. My driver isn't going to the airport to fly. He's going to the airport to drive me to the airport. We put people going to the same place in one car so they travel together.
One key difference is Uber and Lyft are the same, city to city -- we don't do that. We don't do trips from London to London. We do London-Manchester, Paris-Brussels. We do Munich to Berlin. Uber is great for intercity traffic. But without Uberpool, they don't take a car off the road. They take a passenger off the wheel maybe. Job creation for Uber, I buy it. But in terms of getting cars off the road, it's less obvious than what we do.
IBTimes: What’s the regulation situation for drivers?
Brusson: The whole notion is about sharing a cost. What the regulators think of that is essentially you need to look at what's being shared, as in cost. Then you go to the tax office, essentially they say if you use your car for work, then your employer should pay you 50 or 60 cents.
What we do is we make sure the drivers always make less than that. So essentially what they do, they're actually sharing the cost of driving from London to Berlin. By doing that, (a) it's a true sharing experience, and (b) you have no regulation problem, no tax problem, no insurance problem, because you have the paradigm of friends sharing a ride.
IBTimes: Does that mean drivers can’t make a profit?
Brusson: They don't make a profit. Essentially, the way to think of it is the drivers are doing it anyway. If I book a seat in your car and give you 20 bucks, you're still making 20 bucks you wouldn't have made anyway. From a profit-and-loss point of view, you say you're going to drive for business, you'll never make money. It's a cost-sharing activity.
It works well in long distance because if you think of this paradigm of 50 or 60 cents per mile, when you do 200 miles, the average trip, you could provide a seat for $25, and that beats the cost of the train or flying.
IBTimes: Is BlaBlaCar looking to address shorter trips and carpooling on a daily basis?
Brusson: I think it's a longer term for us. We create profiles, we check several things, we have peer reviews, very strong communities, lots of information about you when you book a seat or drive.
We might go into that space longer-term and try to crack that model, but it would be different. It might be a subscription model where you're part of a community on a route. It's yet to be cracked, and no one has cracked it.
IBTimes: Do services like BlaBlaCar help the environment?
Brusson: It's a huge impact, actually. When you look at the average BlaBlaCar, it has 2.8 people in the car. Right, so it's the driver and 1.8 passengers on average. If you look at car occupancy data in the U.S. or Europe, it's more or less the same. It's 1.5 or 1.6 people per car. So we increase car occupancy enormously between cities.
Does it take cars off the road? Yes. At small scale, it doesn't matter. But when you have 16 million Europeans actually using the service, it's huge.
We actually enjoy energy certificates in countries like France and pretty soon in Italy. The states in Europe recognize us as an energy-saving activity. It’s not the carbon market, but it's an energy market, essentially. Our activity is going to save energy. If you're a polluter company, the state will tax you or you will have to buy credits. We sell those credits to companies that pollute.
IBT: There are 16 million active users?
Brusson: Well, 16 million members that signed up. We carry 2 million passengers on a monthly basis. People don't use BlaBlaCar every day, so it depends on usage patterns.
IBTimes: Who are your power users?
Brusson: Average age of our passengers is 30 years old, so it's young, but not that young. In most markets, especially Europe, it’s half women. People tend to think it's all male-dominated, but it's not that way. It’s very diverse. In a number of years, I'll probably be saying a third of Europe has tried BlaBlaCar.
IBT: There are BlaBlaCar trips from New York on the app already. Bug or feature?
Brusson: We had some random trips before we launched in India. It's Google Maps-powered, so you can put whatever you want. People told me that several times, there are people using it in Canada. [Looks at his phone.] Two available seats. Twenty-nine pounds. New York to Montreal. Twenty-nine pounds, that's like $40. So maybe we should launch in the U.S.
IBTimes: Are you going to launch in the U.S.?
Brusson: No. Not anytime soon, actually. We're so busy launching in emerging markets right now. Other thing about U.S. that’s fundamentally different from Europe is it’s the country where the cost of driving is the lowest in the world. And it's a rich country. So if you think the ratio between the two -- people in the U.S. driving 100 miles -- is hurting them financially? Some do, but for the most part, not really. The price of driving a mile in Europe is three times higher.
There is a bit of a structural issue in the United States. The way communities work in BlaBlaCar is that there's a pickup location and a drop-off location. But the two or three or four passengers have to find their way to the pickup location. And then they have to find their way home. So you need cities with decent public transport.
IBTimes: What emerging market are you most excited about?
Brusson: India. Because its transport is very dysfunctional, it’s a huge market, and car ownership is exploding. We just launched in Mexico. We haven't launched in Brazil, but I'm sure it's going to work well.
Brazil will launch end of the year, maybe next year, but firmly on the map. Then you're exploring the rest of Asia, and there I don't know yet, but we need to explore countries like Indonesia and develop countries like Japan and Korea.
What we do could be absolutely huge in China, but then the question is, how do you operate in China? Do you do a partnership? To me, China and the U.S. are like the ... let's think about them a bit later. Let's do the more obvious things.
IBTimes: Is that why you raised $110 million in venture capital?
Brusson: I'll explain how we launch: When we launch a new market, we don't monetize initially. It's about we have the team, and we do marketing, and we build a community. We spend time with early members, we meet them, we go in different cities to meet them. We don't make money from these countries initially. So it's about building the community, building transactions. Monetizing doesn't matter. Now we're doing that on a massive scale; you need to fundraise to do that.
Scale is the biggest challenge we have. If we launched in the U.S. tomorrow, you're going to check New York to D.C., two drivers, that sucks. But if there's 50 people, now there's options, and they probably have ratings and photos and profiles.
IBTimes: What’s next?
Brusson: We're building a transport network between cities. What else can you do with that? You can do shipping. We have trusted drivers going from Munich to Berlin last-minute. Can you take a package? If it's a trusted driver, they can take a laptop box, guitar, something, for a 10th of the cost of using the postal service in a third of the time, because I know the driver is going tonight.
Then the other thing we're building is this massive community of people. The difference between us and Airbnb: Very few people in the Airbnb community meet. So you get peer reviews. They're not peer reviews, they're apartment reviews. I'm staying at an Airbnb in New York. I haven't met the host. So I'll leave a rating, but for the apartment, not on the host. Whereas using BlaBlaCar you meet people all the time. Read the reviews -- people don't just say five stars, they always say something, and the something is always about the person. It's reputation.