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A sharing economy

Thanks to smart online and phone technologies, dynamic new business platforms that are altering the parametres in property, transport and other service-driven markets are fast emerging.

Companies such as Airbnb (helping you to rent or let out a room) and TaskRabbit (helping you pack boxes, walk the dog and other personal chores) have hit the headlines not just for their new business models, but their disruptive effects on established markets and services. Proponents say this “sharing” economy creates more choice and control for customers, while critics say it unfairly undermines competition.

Policymakers are now taking a closer look at how fair the sharing economy really is and to see if any rules need to be rewritten.

We asked the founder of France’s BlaBlaCar, Frederic Mazzella, how his ride-sharing company has evolved to become a prime example of the sharing economy.

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What is BlaBlaCar and how has it developed?

Ten years ago we dreamt of building an affordable people-powered service, in which we could connect drivers with empty seats and people travelling the same way. We believed we could address the inefficiency of cars driving empty when millions of travellers were not fully satisfied with the relatively expensive or unreliable transport systems.

Today, BlaBlaCar has become the most active collaborative consumption community in the world, with over 10 million members in 14 countries, from France to Turkey. BlaBlaCar provides its service on iPhone and Android mobile apps, mobile websites and desktop websites. In 2011, we deployed a new transactional booking model in some of our markets, reducing no-shows and last minute cancellations by a factor of 10, from more than 35% to only 3% of bookings today.

Creating a community of trusted members has been core to BlaBlaCar’s growth. We put all our efforts in providing a reliable platform where members declare their identities, have certified profiles, and provide ratings on other members, moderated by our support team. We are passionate about the role of trust in building the sharing economy, and have created a framework (and even a superhero!) to share our vision with stakeholders: www.betrustman.com.

BlaBlaCar is unlocking a new, largely untapped, low-cost-travel customer segment of the economy, increasing the efficiency of road transport and making long distance travel more accessible.

How has it been affected by legislation?

Our members use BlaBlaCar to share their travel costs with other members. Drivers do not make a profit from their journey. Cost-sharing, which we do every day with our friends and family, is perfectly legal. To ensure that drivers respect this principle, BlaBlaCar recommends a price per passenger for every journey. Drivers offering a ride can fix the price inside the recommended window with a strict ceiling. The price paid by passengers is a contribution towards the drivers’ fuel and running costs (and tolls if there are any). As drivers are not making a profit, drivers’ insurance cover is not affected, and drivers are insured by their usual insurance policy. Thus ride-sharing which is based on cost-sharing is not affected by legislation.

In the BlaBlaCar community, average car occupancy is 2.8 people, versus a European average of 1.6. Since ride-sharing increases the efficiency of road transport, reduces our environmental footprint and provides broader access to affordable long-distance mobility, governments today tend to encourage its practice.

What is the future for BlaBlaCar?

Over the past few years, BlaBlaCar has offered an alternative vision, in phase with the emergence of the connected sharing economy. What has perhaps been most surprising to us is how fast things can change when others catch on to your dream. With 2 million travellers a month, the multiplier effect of a growing viral community is striking. We knew since our early days that we needed to provide a global solution if our members were to be fully satisfied with our platform. Active across 14 countries, BlaBlaCar is now expanding to address the latent demand beyond Europe, and our members are increasingly able to share rides with one same mobile application worldwide. Never resting on our laurels and pushing back the frontiers of our community while best serving our members remains our strongest ambition.

Visit www.blablacar.com

©OECD Observer No 301, Q4 2014

Useful links:

OECD forum 2014: The Sharing Econonmy

What is a taxi? Regulation and the sharing economy