When the Sharing Economy Gets It Right
Here's why: As companies such as Airbnb and Uber rapidly expand, convincing individuals to become micro-entrepreneurs by renting out their home or car--before taking a healthy cut--they are frequently met by regulatory resistance. That's in part because the companies profit heftily from skirting regulations, such as insurance requirements or those pesky occupancy and zoning laws. The same is true for users, plenty of whom have made full-time careers from "sharing" by doing just the opposite: Buying up apartments in Manhattan (or London, or San Franciscio) to rent out full-time on Airbnb, or purchasing a new Escalade to put a new, glammed-up taxi on the road for Uber.
But there's one European company doing sharing right. For most American tech watchers, it just came onto the radar, with an announcement that it had raised $100 million in a cash infusion from a handful of well-regarded venture capital firms. It's called BlaBlaCar--yes, like "blah blah" in English. (Don't scoff: The moment you think that name is too silly to succeed, it will be forever lodged in your brain. Not such shabby branding, if you ask me.)
The name is not just unforgettably silly, it's also a nod to how users find one another. A driver, who is looking for one or more passengers to share the cost of a long-distance drive, rates herself as "Bla," for not very talkative, "Bla Bla," for happy to converse on the ride, and "Bla Bla Bla," for downright chatty. Potential passengers can choose their driver based on this and other metrics, such as the drivers' experience level, and car's comfort level.
An average BlaBlaCar trip is long, though less than 200 miles. That's not the only way it's different from Uber: The driver on BlaBlaCar can charge enough to passengers to cover the cost of the trip--gas, wear and tear--but is not permitted to make a profit on it.
But it's still a good business for the company behind the service. BlaBlaCar, which was founded in 2006 by Francis Nappez, Nicolas Brusson, and Frédéric Mazzella, takes a 12 percent cut of every ride. It estimates that one million users--out of its eight million registered--share rides each month.
Now, with 150 employees, and with $100 million more in the bank, the company is poised to expand internationally. (It already has expanded to 11 new countries since 2012.) The next targets: Turkey, Brazil, and India.
The investment comes from Accel Partners and Index Ventures, along with ISAI and Lead Edge Capital, and is classified as a Series C investment, as the company has previously taken seed investment and has undergone two previous significant rounds of VC funding.
"Our very successful new market expansion demonstrates that BlaBlaCar is relevant on a global scale," said Brusson, BlaBlaCar's operations chief. "This $100 million round provides firepower for us to explore every large market in the world, where access to ground transport can be improved upon."
It's clearly the new company to watch in the sharing economy--and it actually facilitates true sharing. But could it work in the United States?
That's an open question. If the business sounds a lot like Lyft's former business, ZimRide, that's because it is. Both are essentially ride-share bulletin boards that hope to cut down on car ownership. Both were run by whip-smart young founders. Only one--BlaBlaCar--had the potential to truly scale, and do so not just nationally but internationally (Two years ago Lyft's founders pivoted away from ZimRide, creating Lyft and selling their old product to Enterprise Holdings.)
John Zimmer, a co-founder of Lyft and Zimride, told me a few months ago that at the time of its sale, Zimride was essentially replacing the ride-share bulletin board at 150 colleges, universities, and big communities. "But we hadn't made a big dent in the problem of making driving more efficient," he said. "We realized that the frequency was the problem."
So will BlaBlaCar work in the United States?
It's easy to credit Europe's density of cities for the company's success, to say nothing of how European citizens are accustomed to quick car trips that happen to cross national borders. And for car-less Europeans, trains are far more popular than they are for Americans who don't own cars. (The French rail system is one of BlaBlaCar's main competitors, though lots of train trips are more expensive than a seat in a shared car.) And Americans are more likely to fly from San Francisco to Los Angeles than drive or take a train or bus.
The company is shifting people's behaviors by just a few degrees, very gradually, in France and throughout Europe. In the United States, that shift would have to be drastic.
There's also something vaguely socialist in the very model of sharing inherent to BlaBlaCar functioning: the BlaBlaCar community is willing to share with their peers without making a tidy profit.
Très, très European. And I like it.
CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer
Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.