Meet BlaBlaCar, a ride-sharing service for the talkative or taciturn
The service lets passengers find cheap rides from one city to another in 19 countries. But Brazil, not the US, is next on the company's expansion list, CEO Frédéric Mazzella says.
PARIS -- If you're not one of the 20 million people who've hitched a ride on BlaBlaCar, you could be soon.
The Paris-based ride-sharing service, which takes a different tack than more-famous rival Uber, just nabbed $200 million in venture funding to expand beyond the 19 countries where it now operates.
Unlike Uber, which focuses on short, taxi-like rides within cities, BlaBlaCar goes the distance. The idea for the company came during the Christmas holiday in 2003, when co-founder and Chief Executive Frédéric Mazzella found he was too late to book a 300-mile train ride home. His sister ended up driving most of the way to pick him up, and a long-range ride-sharing service was born.
After years of experimentation BlaBlaCar settled on a business that's proved profitable in France, where it began, and other countries, including Turkey, India and Mexico, where it's had time to grow. BlaBlaCar connects passengers and drivers headed the same direction, with passengers paying about 11 cents a mile and the company taking a 10 percent to 15 percent cut of the payment.
BlaBlaCar is a prime example of a company in the so-called sharing economy, which lets you pay to take advantage of assets other people aren't using. With the Internet and smartphones connecting buyers and sellers around the clock, people can find apartments through Airbnb, get a ride across town with Uber or Lyft and rent out their bike through Spinlister.
A different route than Uber's
BlaBlaCar's approach is not the same as that of cab alternative and hot startup Uber, even though they both offer rides and let people make money with their cars. Ninety percent of BlaBlaCar trips are between 50 and 360 miles. BlaBlaCar drivers can also only defray their costs, not make a profit, a choice that helps the company steer clear of regulatory complications and ensure its drivers are covered by ordinary insurance policies. Only with seven passengers would a driver do better than break even.
"Our drivers are not making any profit at all," Mazzella said.
Adding a BlaBlaCar passenger or two can significantly reduce the high costs of driving -- about 73 cents per mile in France. With costs a third as much in the US, drivers aren't so motivated to have a paying passenger. That's why the US won't see BlaBlaCar right away.
"It is not the low-hanging fruit for us," Mazzella said. Next on its list is Brazil, which BlaBlaCar will reach later this year.
Taxi drivers have protested Lyft and Uber, and hotels have fought against Airbnb. So far, BlaBlaCar has escaped that sort of wrath mostly unscathed. The sole exception is a legal complaint by bus drivers in Spain, but their case was undermined by their claim that BlaBlaCar drivers make a profit, Mazzella said. In fact, the company is explicitly set up so it doesn't move drivers out of the regulatory and legal zone of any ordinary driver.
Why the silly name?
BlaBlaCar's name came from a central feature invented to smooth over a business difficulty: members could be uncomfortable riding with people who were too talkative or taciturn. Now they rate themselves bla, blabla or blablabla accordingly.
"We found a way to make people feel at ease," he said. BlaBlaCar may be a peculiar name, but in a test of 30 names, people remembered BlaBlaCar well.
The company has profitable operations in countries like France where it's had time to build its business, Mazzella said. Its expansion means the company is still unprofitable overall, though.
It's easier to expand internationally when BlaBlaCar can acquire a small ride-sharing company with a foothold but not enough members, he said. Good Internet access and widespread Facebook use also helps drivers and passengers trust each other.
The company now links more than 10 million travelers each quarter. So far in 2015, they've driven more than 3 billion miles. Since 2014, BlaBlaCar has doubled its membership from 10 million to 20 million.
"It's always been an exponential curve, but when you go from 10,000 to 20,000, nobody cares," Mazzella said. "When you go from 10 million to 20 million, people begin to look at it like, 'Wow!'"
In September, BlaBlaCar raised $200 million from Insight Venture Partners, Lead Edge Capital and Vostok New Ventures. The investment round placed BlaBlaCar's value at more than $1.5 billion, he said, citing financial analysts.
"Being profitable for us now would be nonsense given the opportunity we have," he said. "In the digital world, if you don't grow fast, someone else will do it for you."
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Uber hit with lawsuit over alleged sexual assaults
The ride-hailing company is being sued after two women allege they were sexually assaulted by Uber drivers. The plaintiffs say Uber needs to do more to keep passengers safe.
Uber has been struck with a new lawsuit alleging the ride-hailing company knowingly neglects the safety of its female customers.
The suit, filed Thursday in US District Court in San Francisco, claims Uber aims its marketing at young women who have been drinking but doesn't conduct adequate background checks on its drivers. That lapse has led to a number of sexual assaults, according to the 52-page complaint filed on behalf of two "Jane Does" who allege their Uber drivers sexually assaulted them.
"What Uber has not shared with riders is that making the choice to hail a ride after drinking also puts those same riders in peril from the Uber drivers themselves," the complaint reads. "By marketing heavily toward young women who have been drinking, while claiming that rider safety is its #1 priority, Uber is instead putting these women at risk."
The lawsuit alleges that Uber's "negligence," "fraud" and "misleading statements" led to the sexual assaults of the two women listed in the complaint. In addition to seeking unspecified damages, the suit is requesting a jury trial and a permanent injunction against Uber to overhaul its safety measures.
If successful, this case could have sweeping repercussions for the company because Uber would be forced to exert more control over its drivers, who are classified as independent contractors rather than employees. Uber is the most valuable venture-backed company in the world, worth more than $50 billion.
The plaintiffs are asking the court to order Uber to boost its safety standards by adding several new measures. These include creating 24-hour customer support hotlines in all cities in which it operates; requiring all drivers to install GPS tracking systems on their cars that would set off an alarm if deactivated; disabling child-lock features on passenger doors; and conducting fingerprint-based background checks and in-person interviews with drivers.
Uber declined to comment specifically on the lawsuit.
The San Francisco-based company has come under fire for dozens of sexual assaults allegedly carried out by its drivers worldwide. A handful of states, including California and Texas, have launched investigations into Uber, claiming it routinely fails to adequately screen drivers and has hired drivers with criminal histories.
Uber's website says the company has "strict safety standards" and that "the Uber experience has been designed from the ground up with your safety in mind." Before driving for the company, drivers must pass several background checks through a third-party firm called Hirease. In the US, would-be drivers' names are run through seven years of county and federal courthouse records, a multistate criminal database, a national sex offender registry, and Social Security and motor vehicle records. Uber says it rejects anyone who has a history of violent crimes, sexual offenses, gun-related violations or resisting arrest.
"Liability boils down to whether Uber could have foreseen the drivers' misconduct," said Sarju Naran, an attorney who chairs Hoge Fenton's employment law group. "Even with thorough background checks, it is often difficult to predict if or when someone might engage in violent or other criminal acts. But with or without liability, there's no way to avoid the reputational damage caused by these types of incidents."
Two attacks, one lawsuit
Jane Doe 1's alleged assault took place in Boston at around 2:30 a.m. local time on February 8, 2015, after she and her friends had been at a party, the complaint says. The Uber driver dropped off Jane Doe 1's friends first, drove her along an off-route detour and then groped her and forcibly kissed her, according to the complaint. She managed to unlock the car door and escape.
The complaint says Jane Doe 2 was at a bar with friends in Charleston, South Carolina, on August 9, 2015, when they were picked up by an Uber driver. After dropping off her friends, the driver drove Doe 2 to a remote parking lot and raped her, according to the complaint. Doe 2 then escaped and got help.
Uber barred those drivers from its service immediately after the incidents were reported, according to a company spokesman.
"Our thoughts remain with the victims of these two terrible incidents," said the Uber spokesman in an emailed statement. "We proactively worked with law enforcement in Massachusetts and South Carolina at the time to share information and aid their investigations. Both drivers have been permanently removed from the platform."
Dozens of alleged sexual assaults by Uber drivers against passengers have been reported over the past year, within the US and in India, France, China and Canada.
"No woman should have to be physically violated because a company has decided to put profits over safety," said Douglas Wigdor, of Wigdor LLP, who filed the lawsuit. Wigdor also represented the hotel maid who brought sexual assault charges against Dominique Strauss-Kahn, former chief of the International Monetary Fund. That suit settled in 2012 for an unspecified amount.
Update, 3:09 p.m. PT: with comment from Uber spokesman.
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