“We want to help the market, not to compete with it, so that carriers feel comfortable,” Alexey Lazarenko, the General Manager of BlaBlaCar and Busfor companies in Ukraine
Alexey Lazarenko is the General Manager of BlaBlaCar and Busfor companies in Ukraine. The service for the selection of BlaBlaCar travel companions is used by 8 million people in Ukraine, of which 1 million are used monthly.
On the air of the Big Fish Youtube channel, Alexey spoke about the creation and the sale of the Podorozhnik service, the state of the Ukrainian bus market, and how the pandemic affected BlaBlaCar.
ABOUT THE ROADWAY
Somehow it dawned on me that we are using our automotive resource irrationally. It was in 2010, when such services and culture of fellow travelers did not exist yet. Six months after the arrival of Google Maps, we released the first version of the product. We collaborated with music festivals, which was the impetus for growth. A year after the start, we raised $100,000.
Tens of thousands of people were using Podorozhnik by the time it was sold. Negotiations on the terms of the deal took 9-10 months. We were not interested in cash-out, we were and remain fanatics of our business. It meant the shares of the BlaBlaCar company.
After talking with the founders of BlaBlaCar, I realized that we share common values. At the same time, they knew that BlaBlaCar was okay for the European mentality, and everything outside Europe was considered the Wild West. We showed them that our audience is mentally similar to the European one.
Plantain focused on all segments – city and intercity. BlaBlaCar said that their focus is only intercity. At first, we rejected all attempts by commercial carriers to access our platform. However, the survey showed that 70% of people do not mind having buses in search results.
ABOUT BUSES IN FIGURES
The bus market in Ukraine is 700 million – 1 billion dollars a year. It’s huge, but very fragmented, with only 10% online. In total, there are about 2 thousand carriers in the country.
The bus vertical exists both in our country and in Europe, but they are different in structure. In Europe, it is easier – there are 2-3 large carriers per country, each with about 15% of the market, which you negotiate with. Vice versa is here: even the largest players occupy up to 5% of the market.
Therefore, the marketplace model is more suitable for Ukraine. In the bus segment, the main monetization is the commission for ticket sales. We sell hundreds of thousands of tickets every month.
ABOUT PLANS FOR MONETIZATION
Our business consists of two verticals: carpool and bus travel. We wanted to start back in 2019-2020, but in 2020 we turned off monetization to prevent making money when people were already having a hard time. By the end of this year, we plan to start the first tests of carpool monetization.
ABOUT BLABLALINES IN FRANCE
In France, there are BlaBlaLines – a segment of joint short trips, for example, from home to work. It is a completely different product, albeit in the BlaBlaCar system. In Paris, we are also experimenting with scooters. BlaBlaCar is the undisputed leader in the road travel niche, it makes sense to develop it.
ABOUT OFFICE AND TEAM
The Ukrainian office employs 70 people, and we want to grow to 100 by the end of the year. The Bizdev team is quite large. There is also a team of technologists, B2B support, financiers, lawyers, and the administration department. We want to create an engineering hub in which specialists will work not only for the Ukrainian market, but for the entire BlaBlaCar ecosystem. It is the bus segment.
Carpool is a lifesaver, because you don’t have to contact with a lot of people. Globally, the entire travel segment sank. Some niches sank to 70-80%. BlaBlaCar did not drop below 30%. We did not grow as planned, but there was no global drawdown either.
My strategy is moderately conservative and aggressive. I invest in different areas. The most conservative of them is real estate, the less conservative is the stock market. The most aggressive and risky are cryptocurrencies. There are businesses, in which I have a stake. Syndicates, that allow you to invest in non-public companies, are interesting from a perspective point of view.
ABOUT BLABLACAR STRATEGY
BlaBlaCar’s strategy for expansion is the same: we come to the market, invest in the formation of liquidity for several years. When we understand that we have reached certain indicators, we turn on monetization. Ukraine has been ready for it for a long time. 2019 was dedicated to the Busfor deal. BlablaCar is already monetized in almost all markets and is deliberately reinvesting profits into expansion.
As for BlaBlaLines, I really want them to appear in Ukraine, because I see colossal value and a huge market. But how soon this service will appear, I am not ready to answer. There will be no BlaBlaBus in Ukraine.
We want to help the market, not to compete with it, so that carriers feel comfortable. The exhaust from it would be more than if we made our own carrier. At the same time, we have BlaBlaBus outside of Ukraine. There is no point in a marketplace, considering the specifecs of the market.