Technology of the week: BlaBlaCar & Getaround


The words that describe this last decade the best are: globalization and digitalization. Getting from point A to point B has never been easier, you just search online for your preferred means of transport and voila; a list of options will appear. Nowadays, simply finding an option that gets you to your preferred location isn’t enough, it also needs to be the most cost-efficient option. We have decided to compare two companies who try to fulfill this need through electronic markets: BlaBlaCar and Getaround.

BlaBlaCar is French ridesharing company who connects drivers who are going to a certain location to find passengers going the same direction. This way the empty car seats are filled, so the fuel costs are shared and people have someone to talk to (hence the name BlaBlaCar).

Getaround is an American company who does not offer rides but offers actual cars. The website/application enables private car owners to rent their cars to individuals. However Getaround does not just connect car owner and car searcher, it also provides a full insurance when a deal has been made, so there can be no question of the safety of ones car.

Both companies fulfill the functional requirement of getting a person from 1 place to another, however while the means seem similar there are a lot of important differences. Getaround has a lot of problems with information asymmetry, specifically adverse selection. When a deal is made on the Getaround website/application it has to be paid immediately, resulting in a situation where the car provider can give inaccurate or false information about the car without the buyer being able to verify this information. BlaBlaCar has a problem with its easy to copy concept. Because they provide no other services except of being a middleman, any successful competitor can become a big threat for them, especially when the competitor would ask a lower fee.

As with most C2C e-markets, these companies are heavily subjected to network effects, the worth of their website/application is largely decided on how big their (active) user base is. In established markets this is an advantage, however expanding to other markets will be very difficult. Because the network effects for 1 market cannot be used for another market. For example; having a lot of ridesharing options in Germany is useless for someone looking for a ride in China. This is however the main difference between these 2 companies, while Getaround has a local expansion strategy within the USA, BlaBlaCar uses an aggressive expansion strategy where they want to be active in as many countries as quickly as possible to gain some market share before competitors get active within the market. Therefor we predict that BlaBlaCar will be active globally, while Getaround will remain in certain areas in the USA.

References:

– Dimoka, A., Hong, Y., and Pavlou, P.A. 2012. On Product Uncertainty in Online Markets: Theory and Evidence. MIS Quarterly. Forthcoming.

– Granados, N., Kauffman, R.J., and King, B. 2008. How Has Electronic Travel Distribution Been Transformed? A Test of the Theory of Newly-Vulnerable Markets. Journal of Management Information Systems 25(2) 73-96.

439290dl – Daniel Lanier

439212fb – Francesco Benedetti

439206ma – Marius Aarstein Andersen

345516yn – Yuran Najl Hossaini

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