The whole of France fits into Bahia, one of the 27 Brazilian states. That’s how Ricardo Leite, Brazil country manager at BlaBlaCar, tends to illustrate the scale of opportunities for the long-distance carpooling firm in one of its top three markets globally.
A population of 210 million people coupled with 50 million cars that are expensive to acquire and maintain and an inefficient public transport network makes Brazil a great market for the firm to thrive. Following its success in the country since launching in 2015, BlaBlaCar now wants to introduce subscriptions, insurance and pursue opportunities in the transport sector to monetize the local operation.
The French company has attracted over 3 million users in Brazil and expansion has been accelerating, with 250,000 new sign ups in December alone, 80 percent of which coming through word of mouth. This “off-the-charts” growth rate, says Leite, is particularly noteworthy when compared with more mature markets where it has been present for longer.
“Brazil has a lot of potential for us, given its population and fleet. These drivers motivated the launch of the service here, but we have been growing significantly and actually fulfilling that potential,” Leite points out.
When it comes to new ways of making money in Brazil, the company has been testing monthly and weekly subscription options to nail down the best model. It is also readying an insurance offering, already a key revenue source for the company in European markets.
As access to services moves away from ownership towards consumption, BlaBlaCar expects to factor insurance into users’ transportation spend. “The argument is that [insurance costs] can be diluted and, through offering rides on BlaBlaCar and sharing costs, become something more granular and viable,” Leite says.
The company is also seeking to get closer to transport operators, as seen in the purchase of Ouibus, a bus service that was operated by France’s national railway company SNCF, in November. According to Leite, that could also be a possibility for the Brazilian market, where traditional players are looking at ways to optimize vehicle occupancy rates.
“Brazil is very different to European markets, but it is just a matter of time until we enter that segment, similarly to how we did it in France. It is quite possible that we will advance on that front this year,” he adds.
“We have been talking to [transport] companies in Brazil for quite some time. We thought they would see us as an enemy, but they have come to us with different proposals around ways we could work together and actually see us as partners.”
Plans for the Brazilian market in 2019 also include testing BlaBlaLines, the app’s service for shorter commutes ranging between 15-70 kilometers.
There are some peculiarities in relation to Brazil when compared to other markets where BlaBlaCar operates. For example, the country ranks first globally in terms of mobile use, with about 80 percent of all rides being offered or booked via the app. Local cultural characteristics also stand out, according to Leite:
“Brazilians are using the service in order to save money, but they like it because of the people they get to know in the car. That friendliness also ends up translating into higher retention rates than averages in other countries,” he observes.
Another local feature of the Brazilian market is the tendency to offer rides at short notice: according to Leite, the amount of rides offered in the last 48 hours tends to be higher than averages seen in Europe. There is also a concentration in large urban centers, and the company has been working on addressing that over the last year, by enhancing front and back-end functionality of the app.
“When you think of long-distance transportation you usually think of bus stations or airports. When you think of carpooling, that condition is eliminated as it is possible to leave from just about any location. We are developing features whereby we can match passengers and drivers to add granularity to the network,” Leite says.
The idea is to develop a functionality that already exists in other markets in Brazil. For example, drivers traveling from São Paulo to Rio de Janeiro would be able to pick up passengers in towns and locations along the way and not necessarily in large cities.
“We want to educate users that they can actually choose to leave from a place that is more convenient to them,” says Leite, adding that the functionality already exists in Brazil and represents 10 percent of all rides completed last year, but the firm is still testing the model with a view of adapting it to local realities.
As the sharing economy evolves in Brazil, BlaBlaCar is not isolated in that process, says Leite. Factors including the diminishing interest in owning a car among young people, increased penetration of smartphones and 4G networks, as well as diversification of payment options are among the indicators that point to predictions of sustained growth for the firm in the coming years.
Within the next few months, however, the main objective for Leite’s team in Brazil will be to start delivering financial results to the French headquarters: “In 2019, we hope to continue to exceed our growth targets and find ways to monetize the operation. We sell products such as travel and car insurance in Europe and there’s nothing stopping us from doing it here too.”
BlaBlaCar is a carpool app that connects drivers with empty seats in passenger cars going in the same direction. Traveling together, they share travel costs and have a social experience. BlaBlaCar’s focus is on long distance, intercity or interstate travel.
Drivers can save up to 75% of travel costs, such as fuel, tolls and maintenance. A driver who makes a round trip between Sao Paulo and Rio de Janeiro once a month, for example, can save more than $ 3,500 a year.
Passengers have a carriage alternative with a number of advantages over traditional buses. Rides are:
• 30-60% cheaper than bus tickets
• Often more comfortable
• Often more convenient, as there may be a driver coming from near the passenger, therefore there is no need to go to the bus station
• For those who live in small towns, it is often necessary to take buses or take buses that stop in several cities along the way. Frequently hitchhiking decreases or eliminates the need for these
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