by Mitch Kokai
Senior Political Analyst, John Locke Foundation
The Ubers and Lyfts of the world are often described as ride-sharing services, but that’s not quite what they are. When hailing a ride with those apps, you hop into a car with a more or less professional driver who picks up another fare after dropping you off. Functioning as a taxi service without the same accreditation continues to pose problems for such companies. Uber suspended its cheapest service in France on July 3 after the Paris prosecutor’s office charged its top two executives there with “misleading commercial practices” and “complicity in the illegal exercise of the taxi profession.” The company said in a statement that it wants to continue discussing regulations with the government.
Paris startup BlaBlaCar works differently. Its marketplace matches drivers who have empty seats for long-distance drives with passengers going the same way and makes them arrange how they’ll divvy up fuel and tolls—in other words, a carpool. To avoid provoking regulators in the 19 countries where it operates, BlaBlaCar limits what drivers can charge, ostensibly keeping them from turning a profit. On a recent look, the site offered a seat in a Peugeot from Barcelona to Madrid for €25 ($27.65); and London to Manchester for £15 ($23.01) in a Mercedes. “You have no regulation issues, you have no tax issues, you have no insurance issues, because people are sharing a cost,” says Nicolas Brusson, co-founder and chief operating officer.
About 3 million people use BlaBlaCar monthly to arrange trips; the company makes its money from 10 percent service fees on passengers. It requires drivers and passengers to register as members—it has more than 20 million—and encourages reviews from both. The feedback “creates trust and a fair economic incentive,” says Philippe Botteri, a partner at BlaBlaCar investor Accel Partners, and has helped make BlaBlaCar the leading carpool business in Europe. The company has raised about $110 million since it was founded in Paris in 2006. Now it’s seeking new investment that would value it at more than $1 billion, according to three people with knowledge of the matter.