One of the most exciting European tech startups is BlaBlaCar, the French ride-sharing app that lets people split the cost of fuel on journeys between cities: The company recently raised a $US200 million (£127 million) round of investment that values BlaBlaCar at $US1.6 billion (£780 million). Yet the company has no presence in the US and no plans to launch there soon, COO Nicolas Brusson told Business Insider at Web Summit in Dublin today.
On its face, this seems weird: America is a massive market that loves ride-sharing apps like Uber; it has terrible train links between its major cities; short flights between nearby cities can be expensive and inconvenient (think of the airport wait-time); and Americans think nothing of casually driving 200 miles a day — which is the kind of distance that is a sweet spot for BlaBlaCar drivers and passengers. BlaBlaCar also replaces hitchhiking by making it safer and easier, in the much the same way Airbnb and Uber do in their sectors — by reassuring both sides of a transaction that the other person they’re dealing with has been checked out and peer-rated.
And, BlaBlaCar has the kind of global ambitions that Uber does.
So why don’t Americans want to get between cities cheaply by sharing a ride on BlaBlaCar, when they’re seemingly so willing to do the same for a short trip inside a city on Uber?
It turns out that the US’s lack of public transport infrastructure in most cities hobbles BlaBlaCar from developing there while giving an artificial boost to Uber, Brusson says.
On a typical BlaBlaCar trip, the driver might say, “I am leaving from this location in London and will drop people at Picadilly Station in Manchester. Show up at this place in London if you want to share the ride and the cost.” The start and end location don’t matter because both London and Manchester have great bus, train and underground links, so it is easy for someone without a car to get to the driver, and to get to their final destination after they have been dropped off. Public transport means that the driver doesn’t have to ferry passengers around a traffic-choked city, dropping each one off, like a taxi. “So you need good public transport within cities to take care of the first part and the last part” of the journey, Brusson says.
But in the US, “If I tell you I’ll drop you off in Sunnyvale and you actually live in Palo Alto, what are you going to do? Good luck,” Brusson says. “So that’s an issue we have in the US, the fabric of the city, the fabric of the network is not ideal. It’s also why Uber is so popular because Uber is replacing a lack of public transport” in the US, he says.
This is fascinating because it shows how government public spending and infrastructure decisions can either encourage new businesses or prevent them. BlaBlaCar is huge in Germany because it’s easy to get around without a car in most German cities. And while train links between German cities are good too, BlaBlaCar opens up a new market of riders who want to make those same journeys at a fraction of the train cost.
And while American cities, with their lousy bus networks and mostly non-existent subway and light rail systems, are perfect for a service like Uber, they militate against BlaBlaCar’s long-journey app service.
In the rest of the world, however, BlaBlaCar is growing like crazy. Here are the company’s latest metrics, per Brusson:
- 10 million people travelling every quarter.
- The traveller count is doubling year on year.
- 20 million people signed up in total.
- Average trip cost is 20 euros ($US20).
- BlaBlaCar takes a 10-15% cut of each journey cost, except in new markets where it waives the cut while the service is being introduced and ramped up.
- 400 employees in 19 countries and 13 locations, including Moscow Sao Paulo, Mexico City, London and Paris.
Those numbers imply that BlaBlaCar’s revenues could currently be something like $US96 million annually (10 million travellers per quarter x $US20 per trip x four quarters x 12% cut = $US96 million). That’s up from our previous estimate in September of $US72 million. Brusson declined to discuss revenues but invited us to do the maths ourselves.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.