blablacar-business-model

How Does BlaBlaCar Make Money? The BlaBlaCar Business Model In A Nutshell

BlaBlaCar is a French online carpooling marketplace connecting drivers and passengers willing to share the cost of a journey. BlaBlaCar makes money by charging a service fee to its customers. The exact fee depends on the total amount the driver sets for the ride. The company also shares ride revenue with bus operators that adopt its branding in their fleet.

History of BlaBlaCar

The company was founded in 2006 by Frederic Mazzella, Francis Nappez, and Nicolas Brusson.

The idea for BlaBlaCar came after Mazella wanted to return to his family home in the French countryside for Christmas in 2003. Finding that all the trains were booked out for the holiday season, he eventually secured a ride with his sister. On the way home, he noticed that most of the cars on the highway had empty seats. This is when inspiration struck. He thought, “If I put all those cars with empty seats, in a search engine, such that people can search the available seats in those cars, just like they do while booking a train.

BlaBlaCar was launched to the French public in 2004 as Covoiturage, but Mazella lacked the necessary business acumen to grow the company. To improve his skills in this area, he decided to complete his MBA. While studying, he met fellow co-founder Brusson who had previously worked for several start-ups in Silicon Valley. Together, they crafted a business plan and software engineer Nappez joined the pair two years later.

The turning point for Covoiturage came in 2007 after a French train strike caused commuters to look for alternative forms of transportation. Many enjoyed their initial carpooling experience and became loyal members as a result. Another surge of demand resulted in 2009 after a volcanic eruption in Iceland caused many flights to be canceled.

The public exposure from these two events allowed the co-founders to secure their first round of institutional funding, with the platform passing one million members in 2011. Rapid expansion across Europe, India, Russia, and parts of South America took place in the following years, no doubt helped by the popularity of services like Uber and Airbnb that made interacting with strangers while traveling more commonplace. 

After several more rounds of funding and multiple acquisitions, the platform now services more than 90 million people in 22 countries.

BlaBlaCar revenue generation

BlaBlaCar works on the marketplace business model, matching the supply of drivers with the transportation demand of consumers. The company employs multiple revenue streams, with each explained in detail below.

Service fees

Service fees are charged by the company to passengers based on the total amount the driver sets for the ride.

These fees vary according to country. In the United Kingdom, for example, the service fee is £3.00 when the driver offers a ride for £13.00 to £17.00.

For longer rides costing more than £79, there is a fixed charge of £0.89 plus 9.9% of the total amount the driver is asking. 

Revenue sharing

Under the BlaBlaBus brand, the company partners with local bus operators to offer rides to those preferring a larger form of transport. 

Through this partnership, BlaBlaCar and its partners share ride revenue. Though the specific amount is undisclosed, competitor services take between 25 and 30% of the total revenue and give the partner operator the remainder.

Referral fees

BlaBlaCar also sells insurance to its drivers to protect them against civil liability and damages related to theft, broken glass, and extreme weather.

Here, the company is paid a referral fee for every new sign-up it sends to the insurance provider it has partnered with. In theory, the insurance risk is minimized since BlaBlaCar considers the distance a driver has traveled on its platform and their average review rating from consumers.

Subscriptions

The company also sells a platform called Octobus to various bus operators to help them digitize their operations. The cloud-based service helps bus companies maintain sales and distribution, CRM, revenue management, and fleet efficiency.

There are three subscriptions to choose from:

  1. Base ($99/month) – offering inventory management, discounts, ticket and order management, and a sales and booking module.
  2. Smart ($149/month) – offering all Base features plus an express booking module, customer registration module, and aggregate and ticket sales from other systems. 
  3. Pro ($229/month) – offering all Smart features plus a distributed network, mailing list and newsletter functionality, analytics, and statistics. 

Key takeaways:

  • BlaBlaCar is a French online carpooling marketplace founded in 2006 by Frederic Mazzella, Francis Nappez, and Nicolas Brusson. Mazzella came up with the idea for the company after failing to book a train ticket to his family home for Christmas.
  • BlaBlaCar makes money by charging a service fee to its customers. The exact fee depends on the total amount the driver sets for the ride. The company also shares ride revenue with bus operators that adopt its branding in their fleet.
  • BlaBlaCar sells insurance to drivers to protect them against a variety of potential damages. The company also offers a digital management platform for bus companies who wish to streamline their operations.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"