For many people, hitchhiking from Paris to Moscow would at best be considered adventurous, at worst dangerous – even a little crazy. But what if that journey was based on trust, and it cost you 75% less than a last-minute train journey?
In essence that's the business model of French online ride-sharing company BlaBlaCar, which has grown from 400,000 monthly users to a million in just over a year. Today the firm has a presence in 12 European countries, most recently in Russia, and transports more people for less each month than EuroStar.
By creating tangible value for its 6 million members in Europe, the company's co-founder, Nicolas Brusson, believes they have created a recession-proof business, which now has sights on "extremely rapid international growth".
According to Brusson, part of the growth strategy involves actively building partnerships with online travel agents and other major actors of connected travel. Where the company is seeing real growth is in the leisure travel market. "People are increasingly using BlaBlaCar as a way to save money on their holidays, mini-breaks and getaway weekends, as we offer very low last-minute prices and that taps into new demand," Brusson says.
In fact, customer retention – a bugbear for many in a world of endless consumer choice – seems less of a problem for BlaBlaCar. "When we speak to our users, we get one key insight: after a members' first trip, retention is not an issue. Drivers say things like: ‘When I'm on the motorway alone, I look at the empty seats and the money I could have got back. It feels wasteful'."
Tipping point
It certainly seems that the economic climate has permanently affected the mobility market: and in the past few years people have radically rationalised their spending on transport, one of biggest items on every household budget in Europe.
Brusson believes that 2014 will be the tipping point as collaborative transport becomes mainstream in Europe. "When bike-sharing schemes began popping up in cities across Europe, years ago, attitudes really began to change," he says. Then cities like Paris installed shared car fleets on the streets, and last year Avis bought Zipcar.
Passengers' lives have also changed for the better – again that thing of creating value. "Before the growth of BlaBlaCar, it was impossible for people to compress their long distance domestic travel costs. Now people on a budget, students for example, no longer have to choose between planning travel weeks in advance in order to avoid dynamic pricing or to stay put.
Building trust, creating value
As with anything like this, there is the question: how to build trust in the community? "We do a number of things to ensure that our community is authentic and that it continues to grow in a spirit of positive social interaction," says Brusson. A key factor in making this work has been to ensure that members feel comfortable travelling with each other.
When launching in new markets, Brusson acknowledges that using the service requires a shift in behaviour so that can mean "a bit of hand-holding" to begin with because the concept is new. But it doesn't take long before users see the value, he says.
Part of this has been achieved by building a website, which is essentially a social network, with:
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smart social trust features, such as online identity verification
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rating mechanisms that allow members to build reputations in the community.
Part of building trust, in a world where saving matters, means delivering value for money. Unlike similar for-profit US models, BlaBlaCar asks its drivers to simply offset their costs rather than make a profit. While one could see this as a move to avoid potential regulatory issues, Brusson seems genuinely altruistic and committed to a peer-to-peer model that really is about sharing and creating value. And as an added bonus, he believes he is heading up a recession proof business!
Nicolas Brusson, co-founder BlaBlaCar, will be sharing his insights at this year's Travel Distribution Summit, Europe in London May.
