To get to the Russian capital from Vladimir, a city 200km east of Moscow, locals who can’t or won’t drive do not have a whole lot of choices. The train is the fastest and most comfortable method, but the prices vary wildly – from RUB600 ($9) to RUB4700 ($70) – depending on the train, and the schedule isn’t the most accommodating. Buses leave the station almost every hour, with a trip costing about RUB450, cheaper than any train ticket. But the experience, like in most cities throughout Russia, isn’t the best one: tickets can only be bought at the crowded and poorly lit bus station or directly from the bus driver, while the buses themselves often feel like they should have been retired from service long ago. Some are newer, but there is no way of knowing which one you will get.
But there is an alternative: since 2014 Russians have been able to use BlaBlaCar, a ridesharing service that connects drivers and passengers. Launched in France in 2006, the company has since expanded to 22 countries and is now worth $1.6bn, according to CBInsights’ “Unicorn List”, and is now growing strongly in Russia too.
Sticking out a thumbski
The idea behind BlaBlaCar is to allow private drivers who would have otherwise travelled with empty seats to fill their car – and help cover the cost of the journey at the same time. Passengers can book their trips directly from the website or the app, and know in advance in what kind of car they will ride and who their driver will be. A review system like that which is increasingly found in other service apps like Airbnb and Uber allows the would-be passenger to quickly evaluate the driver. Trips on BlaBlaCar are almost always cheaper than by bus or by train: to go to Vladimir from Moscow usually costs around RUB350 on the ridesharing service; drivers set their own prices, although the app gives a “recommended” price.
This fresh take on travelling has proven attractive in Russia, which has a long tradition of car sharing from Soviet times, when workers could make up their pay by moonlighting as taxi drivers. The company does not give data on individual countries, but Alexey Lazorenko, head of the company’s Russian branch, tells bne IntelliNews it is growing rapidly. “When we launched, we were aiming at 300,000-400,000 registered users in the first year, which was ambitious, but we actually reached a million in just ten months,” he says. BlaBlaCar also tells bne that more than a million people had registered just this summer. On the most popular route, Moscow/Saint Petersburg, more than 300 trips are available at any given time.
Russia’s recession has made punters more cost conscious and they are looking for cheaper ways of getting around. That means Russian car owners are jumping at the chance to offset the cost of journeys. The passengers are also happy to cut the cost of their trip in half or more. “The economic crisis is one of the drivers of BlaBlaCar’s growth,” says Lazorenko. “People want to save money, that’s natural.”
But Lazorenko is also keen to stress that the economic crisis alone isn’t enough to explain the company’s rapid growth in Russia. “The social experience, this ability to meet new people, it’s a big factor too.”
Vladimir, a 24-year-old from Krasnodar, has already made more than 80 trips as a driver on BlaBlaCar: “It’s an additional income for me, and it makes my trips less boring.”
This social aspect of BlaBlaCar was initially grounds for scepticism over whether the service would succeed in Russia, according to Lazorenko. Many argued that Russians are “a closed people, who do not trust each other” and a service making strangers travel together would not work. However, Russians proved to be no less suspicious of each other than the citizens of any of the 21 other countries where BlaBlaCar is active. Lazorenko, however, points at one, still unexplained difference with the rest of Europe: Russians tend to plan their trips just a few hours ahead, while in other countries it is usually two or three days in advance.
BlaBlaCar has picked a good time to enter the Russian market, where the population is already accustomed to using online services to get around. The taxi apps like Uber or Yandex.Taxi are already well established in most of the big cities. The French company has brought to trips between cities what those apps did for transportation inside them.
BlaBlaCar is still losing money, but with no direct competition it can take its time to win market share. A 20% commission has just been introduced on passenger bookings on one route, from Ekaterinburg to Chelyabinsk. “It’s just a testing phase,” says Lazorenko. “We are not trying to monetize as fast as possible, otherwise we could probably have started six months ago. The goal is to do things properly.”
With most forecasts predicting several years of low GDP growth, Russians’ interest for a cost-effective way of travelling is unlikely to diminish.
Source: bne IntelliNews