Regulated France is Fertile Ground for Car-Sharing Industry
31 Mai 2015 - Automotive News
A French firm that helps car owners rent out their vehicles, has bought a German rival in the latest sign that France is becoming a hub for the booming vehicle-sharing sector, with help rather than hindrance from the country's notorious red tape.
Drivy, founded in 2010, has already snapped up two domestic competitors. On Thursday, it announced the purchase of Autonetzer, making it over a third bigger and a European sector leader, with 38,000 registered vehicle owners across France and Germany.
The sums involved remain limited. The deal value was undisclosed but was financed with help from the 8 million euros ($8.8 million) in funds the company raised last year.
Nevertheless, the service plans to expand in Spain too this year.
Its activities also represent a relatively small part of a wider, Internet-enabled car sharing industry which is developing a strong French flavor.
Another French firm, BlablaCar, leads the field in matching private car drivers with travelers heading in the same direction.
And U.S.-based Uber, which has turned the taxi industry upside down worldwide with its phone apps, where cabs and passengers track each other, claims a French connection.
Its inspiration was Paris, according to founder Travis Kalanicki, as he vainly tried to hail a cab one cold winter's day.
France’s regulated transport system
France's transport industry is heavily regulated.
The number of regular taxi drivers is limited. New entrants have to buy their licenses from retiring colleagues at prices that can reach into the hundreds of thousands of euros in some cities.
To protect their investment, cabbies are fiercely defensive of their right to pick up fares without cheap competition.
BlablaCar and Drivy, meanwhile, have flourished in a country where bus travel regulations, eased only this year and intended to protect the railway industry, effectively barred coach and bus operators from carrying passengers on long-distance routes.
Analysts agree that the main driver behind the whole sharing economy globally has been the Internet in general, and the widening ownership of smartphones in particular.
"But the lack of taxis at certain hours has probably favored Uber in France," said Flavien Neuvy, director of the automobile observatory at Cetelem, a consumer credit arm of BNP Paribas.
"And it's true that car sharing has developed most of all in France over long distances, where there are no cheap buses running."
Barely a month has gone by this year without an acquisition by BlablaCar of one of its competitors.
Its accounts are not public, but while in 2012 it was in the same financial space as Drivy, raising $10 million in funding, by 2014 it was able to raise $100 million in a deal that analysts said valued the group at $1 billion.
It is present in 19 countries and could add another zero to its scale should it succeed like Airbnb, the U.S.-based company which uses a similar business model for accommodation. Airbnb is now present in 190 countries and reports have put its value at $10 billion.
Uber, founded in 2009 and based in San Francisco, is already on an even bigger scale, with reports putting its value at as much as $50 billion. On that basis, a listed Uber, should it choose a Paris IPO, could be among France's 10 largest companies.