Bla Bla Car

Matchmaking Model






Bla Bla Car operates a matchmaking business model via its website: it connects drivers and passengers who are willing to travel together between cities, whilst offering the opportunity to directly interact with one another. Passenger-customers complete the financial payments to drivers after initial contact is made. Bla Bla Car derives value from pairing the two groups – it does not provide other key components of the transaction, such as the vehicle or meeting-point facilities.

The company’s main focus is to facilitate the exchange of ridesharing between the two customer groups, but also augments the value of its core match-making platform by providing complementary products. These include free additional insurance coverage, profile building and member ratings. Bla Bla Car allows users to check drivers’ ratings and offer access to the number of connections drivers have on LinkedIn and Facebook. All profiles, photos, ratings, ride offers and ride comments are moderated by BlaBlaCar to maintain trust and respect in the community. [1]

History

The French ride-sharing service was founded in 2006 by Frédéric Mazzella. Motivated by the absence of a peer-to-peer transportation network, he aspired to pair motorists with passengers needing a ride between cities. “The idea was to organize all the available seats in cars just like we organize all the available seats in planes and trains, with a real search engine, and this did not exist.” [2] It has since then grown into a global, people-powered transportation network with 10m registered users across 13 countries, and 2m people use the service every month. [3]

Bla Bla Car has become one of the best-funded technology start-ups in Europe, after receiving in $200m in its latest funding round. The company has taken investment from US venture capital firms Insight Venture Partners and Lead Edge Capital, as well as Stockholm-based Vostok New Ventures. [4]

In April 2015, the company announced that it acquired German start-up, Carpooling.com – which was its biggest competitor – and a Hungary-based company Auto hop. The price of the acquisition was not disclosed. [5] Apart from these two companies, it has also made five other acquisitions.

Customers – Who They Are

Bla Bla Car connects two groups of customers via its website, namely drivers traveling from one city to another, with travelers seeking a vehicle to travel in the same direction. It does not serve customers looking to travel a few miles within a city. The average BlaBlaCar ride is about 213 miles.[6]

Engagement – Value Creation Proposition

In pairing up its two customer groups, Bla Bla Car creates the opportunity for both groups to share the costs of the journey. Drivers are able to save on fuel costs by sharing them with passengers, and passengers can enjoy cheaper travel means than that of traditional routes, such as trains or buses. The French start-up claims that the average ride in Europe costs roughly $25 per person, significantly less than the region’s costly high-speed trains.[7]

For each destination, Bla Bla Car sets a ceiling price in order to ensure that costs are fairly distributed and car-owners are unable to make any profit. Passengers are able to pay drivers via PayPal, or in person.

In order to reinforce the safety of the platform, Bla Bla Car performs security checks on the mobile numbers, e-mails and bank accounts of its users, and encourages members of the community to rate each other, in turn building trust for frequent members.[8] Bla Bla Car also introduced the ‘Ladies Only’ filter, for women who may feel uncomfortable sharing a ride with a male driver. ”

In addition to drivers’ personal car insurance, customers may also benefit from additional insurance coverage – provided free of charge, in partnership with AXA insurance company. In case of breakdown during a ride offered through the Bla Bla Car platform, customers may benefit from roadside assistance and towing to the nearest garage. If the vehicle cannot be repaired within a reasonable delay, the driver and passengers will be transported to their destination. [9]

The company also creates value for the wider economy as it has revolutionized travel by introducing a cost efficient, social mode for travelling. According to the company’s estimation, £216 million is saved by drivers of Bla Bla Car every year. This ridesharing system also generates tremendous benefits for the environment; an estimated 1,000,000 tons of CO2 was saved over the last 12 months. [10]

Delivery – The Value Chain

Customers are able to connect with each other via the Bla Bla Car website and access member profiles easily. The company is technology-driven and uses various social media channels to communicate with its customers, including Facebook, Twitter, Google+, YouTube and Pinterest.[11] Customers can also access the site via Bla Bla Car’s mobile application; which been downloaded over 15 million times, allowing users to gain quick information at a faster speed.

In order to tailor to their global set of customers, Bla Bla Car provides excellent customer service, with more than 450 English-speaking employees from over 30 different countries.

Monetization – Value Capture

The company does not reveal financial information, but based on its flat-rate commission of €2 per ride and its claimed current 600,000 rides per month, revenues are in the region of €1.2m a month. [12]


Reference


[1] Bla Bla Car. (2016). Trust and Safety. Available: https://www.blablacar.co.uk/trust-safety-insurance. Last accessed 14th August 2016.

[2] Hickey, Shane. (2014). BlaBlaCar is to car hire what AirBnB is to the hotel industry. Available: https://www.theguardian.com/business/2014/apr/13/blablacar-hire-airbnb-hotel-car-share-service. Last accessed 9th August 2016.

[3] Murad Ahmed. (2014). Bla Bla Car. Available: http://www.ft.com/cms/s/0/4260cd4e-7c75-11e4-9a86-00144feabdc0.html?siteedition=uk#axzz4HKYwXoir. Last accessed 14th August 2016.

[4] Murad Ahmed. (2015). Bla Bla Car Zooms Ahead. Available: http://www.ft.com/cms/s/0/24d1ac00-5c74-11e5-9846-de406ccb37f2.html#axzz4HDucdfvj. Last accessed 14th August 2016.

[5] Romain Dillet. (2015). Bla Bla Car Acquires Its Biggest Competitor.Available: https://techcrunch.com/2015/04/15/blablacar-acquires-its-biggest-competitor-carpooling-com-to-dominate-european-market/. Last accessed 14th August 2016.

[6] Catherine Clifford. (2015). How Bla Bla Car is Different From Uber.Available: https://www.entrepreneur.com/article/250420. Last accessed 14th August 2016.

[7] Mark Scott. (2015). BlaBlaCar, a French Ride-Sharing Start-Up, Is Valued at $1.6 Billion. Available: http://bits.blogs.nytimes.com/2015/09/16/blablacar-a-french-ride-sharing-start-up-is-valued-at-1-4-billion/?_r=0. Last accessed 14th August 2016.

[8] Hickey, Shane. (2014). BlaBlaCar is to car hire what AirBnB is to the hotel industry. Available: https://www.theguardian.com/business/2014/apr/13/blablacar-hire-airbnb-hotel-car-share-service. Last accessed 9th August 2016.

[9] Bla Bla Car. (2016). Insurance and Ridesharing. Available: https://www.blablacar.co.uk/insurance-ridesharing. Last accessed 14th August 2016.

[10] Bla Bla Car. (2016). About Us. Available: https://www.blablacar.co.uk/about-us. Last accessed 9th August 2016.

[11] My Community Manager. (2014). BlaBlaCar . Available:

http://www.mycommunitymanager.fr/blablacar-community-management-roule/. Last

accessed 9th August 2016.

[12] [12] Carnegy, Hugh. (2013). Hitchhiker app makes money out of sharing a ride. Available: http://www.ft.com/cms/s/0/c338a030-dce5-11e2-b52b-00144feab7de.html?siteedition=uk#axzz4Gq5mm6gO. Last accessed 9th August 2016.

Disclaimer

Written by Halima Begum and edited by Danielle Reza under the direction of Prof Charles Baden-Fuller, Cass Business School, in September 2016. This case is designed to illustrate a business model category. It leverages public sources and is written to further management understanding, and it is not meant to suggest individuals made either correct or incorrect decisions. © 2016




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