France's BlaBlaCar bets on Russia's ride-sharing culture
ST PETERSBURG (Reuters) – Russia has overtaken France as the biggest market for French ride-sharing startup BlaBlaCar, a growth driven by long distances between Russian cities and a culture of giving lifts to strangers, the company’s co-founder and CEO told Reuters.
Nicolas Brusson said the unlisted company, which entered the Russian market four years ago, plans to invest 10 million euros in Russia next year, more than BlaBlaCar’s total investments over the past three to four years.
“We are talking about 15 million members in Russian which means that more than one Russian of ten is already signed in BlaBlaCar. We are speaking about over 3 million Russians that are transported by BlaBlaCar every month,” he said.
BlaBlaCar’s app works by matching passengers with drivers who have spare space in their vehicle and are heading to the same destination.
The company, founded in Paris in 2006, describes itself as the world’s largest carpooling community. It has two models of making money in Europe, taking a service fee from passengers for every journey or allowing the use of its app under subscription.
Brusson said the first reason for the firm’s success in Russia was cultural.
He said it had to work hard in Europe to persuade customers BlaBlaCar was a safe service. “In Russia people are more used to sharing and got the features of the service faster,” he said.
Before ride-sharing services like Uber came to Russia, it was normal for citizens to flag down a private car in the street, and share the ride, for a modest fee. The practice grew out of the fact that car ownership was not widespread, while taxis were heavily regulated and expensive.
Brusson said the second reason BlaBlaCar did well in Russia “is the size of the country, the shape of the country. It’s a kind of perfect for long distance cooperation because of big population, lots of big cities we can help connect.”
Russian economic growth is slowly recovering after two years of recession, but is also under pressure from U.S. sanctions imposed in April on Russian businessmen and big companies.
Brusson said those factors might play to BlaBlaCar’s strengths. “People are going to be more cost-conscious so people will choose services like ours because people can save money and drive cheaper,” he said.
BlaBlaCar is ramping up investment in the Russian market even though its operations in Russia, unlike in European Union markets, are not yet monetized, passengers in Russia pay for their journeys in cash directly to drivers not to the service.
Brusson saw Russia as a very strong financial contributor for BlaBlaCar in terms of four to five years.
“Next year we will invest as much as we’ve done in the last 3-4 years. Because the activity is just doubling year on year, and there is a real need we can help address, so it leads us to invest,” he said.
Reporting by Polina Nikolskaya; Editing by David Evans