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French carpooling marketplace BlaBlaCar recently raised an impressive €100 million (~$108M USD) in new financing. But when you peek behind the headline, it’s actually an even more interesting story. The 17 year old company is profitable, so the fresh cash is actually a revolving credit facility, allowing the startup to snap up competitors (and complementors) struggling with their own economics, while avoiding any dilution of its own.
With that in mind… will the company ever make the leap to the United States? I thought now would be a good time to take a quick look at why monetized carpooling is such a tough nut to crack in America.
Craigslist & Facebook
If you’re looking to hitch a ride in the U.S. today, you’ll likely start by heading to one of two places to find a match. The first would be Craiglist, where the “rideshare” section still collects thousands of relevant post per day.
Your other option is Facebook, where there are hundreds of groups organized around carpools to or from specific destinations. Usually these are universities, and the groups are private, with admins tending not to let in those that can’t prove an association with the school. (Here’s a private group serving UC Davis, and a rare public option for UC Merced.)
Struggle to Scale
While many a great startup has been formed by taking a core Craigslist feature and slapping a better skin on it, carpooling has proved tricky. Many American companies have tried — Zimride (which split in half, with one part becoming Lyft and the carpooling half getting bought and shuttered by Enterprise,) Carma, Scoop, OpenRide (where I once served as an advisor,) Waze Carpool — to name a few shuttered contenders.
But while many a different type of marketplace has managed to scrape users off of Craigslist (and trust me, many of those aforementioned carpooling startups tried that as well,) it can be hard replicating the trust factor this vertical relies on. Everyone in that UC Davis carpooling group trusts each other because they’re a fellow alum with shared social circles. Many of the people on Craigslist know they’re going to the same music festival or special event (a common demand driver) so they have some commonality. That makes it much harder to port those users over to an open platform where they’d mix with the hoi polloi, unlike other marketplaces like say StubHub, Indeed, Airbnb or OKCupid.
Even if you can overcome that, you run into problem two: American mobility patterns. With a far higher car ownership rate, there are fewer Americans that need carpooling to get from A to B, compared to European peers. And thanks to our scarcity of cities with decent transit networks, the first and last mile challenges make carpooling slower for everyone involved. It’s one thing to have everyone say take a train or bus to the city center and hop in the car together; it’s way less compelling if the carpool driver has to make four stops at pickup and another four at dropoff.
Then there are also complications around trip compensation. To avoid TNC licenses, carpooling apps generally have to prove that the trip was going to happen even without a carpool mate, AND that the driver isn’t going to make a profit. That requires capping the compensation at the IRS travel reimbursement rate (currently 65.5 cents per mile) which can be both discouragingly low for drivers, and confusing for riders (since the rate you pay may be variable depending on how many others share the ride.)
Blah Blah Blah…
All that is to say, don’t pity BlaBlaCar that they won’t come to America, pity America that we don’t get to have BlaBlaCar. The company laid out way back in 2015 that it didn’t think it would ever make it to the States; now that it’s making €250 million a year in revenue, it’s clear they don’t need us.
HOT INDUSTRY NEWS & GOSSIP
More Curbivore coverage: The Planning Report recaps LA Deputy Mayor Randall Winston’s opening speech, while VXNews transcribes the amazing conversation we hosted on Celebrate the Streets: Recent Wins on Our Curbs, Roads, Sidewalks and Transit Systems.
Pahk the cah neah Hahvahd Yahd: Boston’s streets may be famously crooked, but at least parking on them soon won’t be so maddening. The City has a new RFP to modernize its ~5,800 parking meters; bids due May 13th.
More wins on the curb: Congrats to our friends at CurbIQ for smartening up the curbs in West Hollywood, CA and Kirkland, WA, as well as scoring a Sourcewell cooperative purchasing contract.
A harbinger of more to come? Electric van chassis maker Harbinger Motors just cut the ribbon on a new HQ in Orange County (CA, not FL,) where it will house not just its white collar workers but do actual hardware manufacturing. With GEM’s LEV plant nearby as well, it’s nice to see some blue collar jobs coming back…
Light rail, heavy ridership: Last week we looked at how transit’s rebound has varied a lot by mode, now let’s take a look at how it compares by city. @NaqiyNY has helpfully compared light rail ridership in different regions, and you can see that LA’s has jumped nearly 30%, thanks to the Regional Connector opening, plus the agency boosting service frequency. SD and SF are up too, while Boston and Seattle have struggled with reliability issues.
Can we get that over here? Sweden’s launched a new app that lets everyday citizens report wrongly parked cars, earning bounties when the parking error is confirmed by a traffic attendant.
Good apple, bad apple: NYC just launched the Office of Livable Streets, aiming to improve the city’s public space and active transportation options. Maybe it can start by undoing the DOT’s move to cut back the operating hours for the popular Willoughby Ave open street?
With apologies to Wall Street South… Yes the pandemic certainly shook up the country’s labor markets, but for the zillionth time: tech did not relocate to Miami. Of the 10 major metros marked by Signalfire, Miami actually saw the smallest growth in big tech employee headcount.
Bike on! DC’s Capital Bikeshare has hit a new service record, with over 20,000 rides on March 16th. Maybe it’s time to actually do a proper expansion into PG County? Meanwhile a new e-bike lending library program in South LA promises to improve mobility and give folks a greener way to work delivery gigs.
Friends with events: Marketplace Risk returns to SF, May 14-16, bringing together top minds working on platform security. Closer to home, VerdeXchange is back in Downtown LA from May 12 to 15. If you’re a student, they’re also looking for volunteers — this is a great way to see how an amazing show like this is run, and meet some of the thought leaders that make it work.
Far from the curb: Okay normally I don’t cover aeronautical developments, but I couldn’t help it… the Skytrax World Airport Awards are out for 2024 and it’s a real shocker! Singapore Changi has been dethroned by Qatar’s Hamad International. Wow, indoor waterfalls are OUT, and Untitled Lamp Bear plus indoor tropical orchards are IN. Also it doesn’t appear that anyone has noticed but… LAX was crowned the best large airport (70 million plus pax) in America. I guess it doesn’t even matter that the people mover is two years behind schedule! (Unrelated, but you really must hear the airport’s hit country single from 1971.)
Bass ackwards: San Francisco’s supposedly progressive Supervisors killed a plan to extend parking meter hours, bemoaning that it would be unfair to lower income parkers. Now in response the city’s transit agency has to raise fares 14% to cover the budget shortfall. Tell me how that’s more fair?
A few good links: Not this again: six Waymos block SF traffic after hitting lane closure near freeway onramp. New data on how remote work changed regional travel patterns. Just Eat Takeaway.com sees weak Q1, exits New Zealand. GoPuff adds Misfits Market. Public delivery lockers go live in NYC. How Amazon became the largest private EV charging operator in the country. $54M in new Federal EV charging money.
Until next week!
- Jonah Bliss & The Curbivore Crew