In it together
CAR- POOLING APP BLANCRIDE AIMS TO END THE NIGHTMARE COMMUTE.
Terrible traffic is just a fact of life for most people who live in the Toronto area, but Hamid Akbari’s gruelling commute inspired him to do something about it.
Akbari, now 38, was commuting f rom downtown Toronto to the University of Ontario Institute of Technology in Oshawa, where he was hired as a professor in 2013, after immigrating to Canada from Iran to complete a PhD in strategic management at York University.
“Commuting is not fun,” Akbari said. “I was looking around at other vehicles, most single- passenger, seeing the same faces and looks like they were bored too.”
To address gridlock and conserve resources, public officials have been trying for decades to find ways to get people to carpool to work. However, co- ordinating a carpool is tricky: Finding people travelling the same route at the same time as you is challenging, picking up strangers can make people nervous and figuring out how to split the cost can be awkward.
Akbari realized a mobile app could solve all those problems, by matching drivers with passengers and making the cost- sharing automatic. And as it happened, his brother and sister- in- law were interested in helping him start a tech business.
There was just one complication: The couple live in Maracaibo, Venezuela. Vahid Akbari had been recruited by a state- run oil and gas company, but with economic conditions deteriorating in Venezuela, he was looking for a change.
Azam Mohabbatian, Akbari’s sister-in-law and BlancRide’s chief technology officer, said the situation pre- sented an opportunity to ease traffic woes in two cities at once. “Venezuela has kind of the same problems (as Toronto)," she said. “All of the country is growing fast and manufacturing is producing some problems such as traffic.”
Together they launched BlancRide, a carpooling app with a Venezuelan technology team, a Toronto head office and Iranian founders. Akbari said the app has about 20,000 users in Maracaibo and 12,000 in Toronto, with plans to expand to more cities in North America and Latin America by the end of this summer.
Sunil Sharma, a managing partner with Extreme Venture Partners, said BlancRide’s international roots and family ties are what convinced him to invest in the company.
“I don’t think, without that component, this story could have even happened,” he said. “There’s that con- fidence of family and technology background that just made this, in my view, investable.”
Akbari had started a business in Iran, but found it wasn’t an easy place to be an entrepreneur. He said he chose Canada for its stability, diversity and robust intellectual property laws.
To start a business here, Akbari took a $ 50,000 bank loan, raised $ 250,000 from family and close friends, and went on to raise an addition- al $ 1 million from a group of investors that included Extreme Venture Partners. BlancRide launched as a pilot available only to UOIT students in the fall of 2014, with 10 per cent of the student body signing up within about 10 weeks.
The additional high occupancy vehicle lanes that opened on Toronto- area highways during last summer’s Pan Am Games were the perfect opportunity for BlancRide to launch citywide, offering frustrated commuters a way to escape the worse- than- usual gridlock by helping them find enough passengers to drive in the lanes without getting a ticket. BlancRide launched in Maracaibo in November.
The app prompts commuters to input the time of day they commute, whether they’re offering or looking for a ride and where they’re going. Users whose commutes match up can message each other, confirm the details and negotiate the fee.
BlancRide avoids t he regulatory headaches that have beset ride- sharing app Uber by making it available only to people looking to recover some of the costs of a trip they make anyway, not those who want to profit from offering rides.
Competition is not a concern yet. European carpooling app BlaBlaCar is worth US$ 1.5 billion and a handful of apps such as Scoop and Ride have tried to break into the U. S. market, but the phenomenon has yet to catch on in a big way in North America.
Akbari said he hopes to see five per cent of the population carpooling by 2020, which could translate to revenue of $ 500 million a year for BlancRide. For now, the app is free so BancRide can grow its user base, but it plans to charge a 20 per cent commission once it expands beyond Toronto and Maracaibo.
Operating on two continents has advantages and challenges. BlancRide benefits from a devalued Venezuelan currency, a university in Maracaibo that provides a good pool of talent and the fact the difference in time zones is only 30 minutes. But it must also navigate two vastly different regulatory regimes, financial systems that aren’t fully integrated and hire bilingual staff.
Despite any challenges, Sharma said he’s interested in working with more startups operating in Canada and a developing country.
“There’s a real fit between taking the stability of a country like Canada, where we have the highest quality of life, and combining it with entrepreneurs and people who are from very challenging conditions,” he said.
“Their personal abilities, I believe, are very strong, because they’re surviving.”
VENEZUELA HAS KIND OF THE SAME PROBLEMS (AS TORONTO).