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Why are carpooling apps popular everywhere but the U.S.?

August 19, 2015, 2:30 PM UTC
Heavy traffic at rush hour on the Interstate 10 Freeway in Los Angeles, California
Photograph by Jonathan Alcorn — Bloomberg via Getty Images

Uber’s early expansion leveraged some clever wordplay. By calling itself a “ride sharing” service, it conjured up images of neighbors hitching lifts to work. That kept regulators from recognizing it as a taxi serviceat least until recently.

But where are the actual ride sharing services? You knowwhat folks used to call carpooling? Carpooling has declined in the U.S. for decades, but shouldn’t new technology make it easier to connect people who need rides with empty seats, for daily commutes or one-time trips?

Few American companies seem interested in trying.

There are plenty of peer-to-peer car rental services, like Getaround and Relayrides. And there are a handful of apps for managing existing private carpool groups. Zimride and Rideshark provide white-label support for college, corporate, and municipal carpool systems.

But the most visible public-access carpool-matching platform, Carma, only operates in a handful of U.S. cities, and only connects commuters, rather than those taking longer trips.

Contrast that with the France-based BlaBlaCar. BlaBlaCar is focused on intercity travelconnecting drivers headed from, say, Munich to Berlin, with riders who chip in for gas. Drivers and riders set up profiles on the BlaBlaCar website, then share or search for rides by destination, just as you’d search for a flight online. Afterwards, they review each other for everything from safety to personality.

BlaBlaCar, founded in 2006, has been phenomenally successful with this model. It now has 20 million user accounts, and provides about 4 million rides a month. It operates across Europe, in the U.K., and in Russia, India, and Mexico. Since passengers are just sharing costs rather than hiring a driver, trips are dirt cheapstarting at around 20 Euros for that Munich to Berlin ride, or 400 rupees (about USD $6) to get from Mumbai to Pune.

BlaBlaCar takes 10% of each transaction, which adds up to enough to support 12 global offices and around 350 employees, and to attract some serious capital. The company closed a $100 million round in 2014, and its backers include Accel Partners (which also funded Facebook and Dropbox), and Index Ventures.

But according to COO Nicolas Brusson, the BlaBlaCar has no plans to expand into the U.S. And Carma has been extremely measured in broadening their service. Carma co-founder Paul Steinberg characterizes his company as “kind of like a pseudo-government agency,” only rolling out in partnership with local authorities.

So what’s the holdup?

Carpool-matching platforms have the same regulatory protections stateside and in Europe. The 2012 Highway Act set standards for what it called “carpools, and real-time ridesharing projects” (see what Uber did there?). When riders compensate drivers only for the costs of gas and wear, drivers don’t need additional insurance or any commercial licensing.

Brusson says the main obstacle in the American market is that driving is just too cheap. With gas and other costs half to one-third what they are in Europe, he says, “the pure incentive on the driver’s side [to pick up carpoolers] is not as strong.”

Americans also have far more options than those in Latin American and Asian markets, where BlaBlaCar is focusing near-term expansion efforts. “Those are areas where the transportation between cities is pretty deficient,” says Brusson, with less developed public transit and less affordable flights. BlaBlaCar’s role in developing countries could be compared to that of cell phones in countries without landlines, enabling them to leapfrog capital-intensive infrastructure development.

So maybe, whatever the environmental benefits, the U.S. doesn’t need real peer-to-peer ridesharing. But in the long term, it might be missing out on something bigger. The data BlaBlaCar is gathering is uniquetens of millions of reviews and ratings of ordinary people, written by other ordinary people who have spent hours in a car with them.

“They end up talking or chatting,” says Brusson. “If you read the reviews, you realize it’s not really about the car or the ride, it’s about the driver or the passenger.”

That kind of detailed, intimate perspective has few parallels. Airbnb and eBay were once peer-to-peer facilitators, but both have shifted in a more commercial direction. Brusson says that the strict regulatory rate caps make it impossible for BlaBlaCar to make a similar turn.

That data is helping BlaBlaCar growthe more reviews, the more people are willing to take a ride with a stranger. But it also opens the door for other trust-based initiatives. Brusson says BlaBlaCar is piloting partnerships with insurers who want better driver data, and might soon roll out peer-to-peer delivery. That would make two more good ideas without traction in the U.S.


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