Europe’s ride-sharing unicorns call for reform to help the sector thrive

PARIS — Ride-sharing giants in Europe have urged reforms for the transport industry, in the hope that it will help them expand further within the continent and face less barriers to innovation.

Co-founders from two of the region’s largest mobility firms, BlaBlaCar and Bolt — formerly Taxify — said the lack of a common framework on carpooling and ride-hailing makes it more difficult to operate across the European Union.

The main issue is that the EU, though a collective bloc of 28 — or soon to be 27 — nations, does not have a unified “definition” of what it means to be a ride-sharing start-up, and therefore this creates a fragmentation among the different member states.

“I think it would help even in our industry if there would be some kind of harmonization of the transport regulations,” Bolt co-founder Martin Villig told CNBC in an interview at the Viva Technology conference in Paris.

The firm has been barred from entering countries like Germany, Italy, Spain and Denmark, Villig said, because those territories do not yet permit transportation start-ups to operate freely. In Spain, for instance, firms like Uber and Spanish company Cabify have faced a local pushback due to discontent in the traditional taxi industry.

“I think that there is a big opportunity to open that market,” Bolt’s co-founder said of untapped markets like Germany and Spain, adding that “giving some general harmonization guidelines from a European level” would help, “and then maybe some smaller details can be handled.”

BlaBlaCar co-founder and President Frederic Mazzella sympathized with Villig’s concerns.

“We face the same thing,” he told CNBC. “We are missing today the European definitions of new businesses that could be applied in all countries.”

Such a lack of definition means that start-ups are having to “explain and reexplain again” their business models to each individual EU state to expand across Europe, Mazzella said.

“Growing a start-up in the U.S. is like running a 100-meter race,” he said. “Growing a start-up in Europe is like running a 110-meter hurdle race.” Europe currently adds 28 hurdles in terms of regulation, he said, albeit noting the caveat of Britain’s departure from the bloc, which would mean 27 hurdles.

Founders like Villig and Mazzella have also in recent months decried the lack of clear-cut rules on stock options across Europe. In an open letter to politicians in November, various start-up founders and executives called for reform around employee stock ownership to help European companies attract more talent and better compete against their gargantuan U.S. rivals.

“In some markets it’s very complicated and you need special lawyers,” Bolt’s Villig said, adding that Estonia — where Bolt is based — is more forward-thinking in this regard. “Part of the DNA of start-up companies is to share the value with the employees who work hard.”

Employee stock options grant staff the ability to buy a specified number of shares of the company they work for at a certain price and at an agreed time.

BlaBlaCar’s Mazzella added that his firm is pushing for Europe-wide visas that allow people to work for start-ups throughout the continent, as tech firms tend to seek global audiences. He highlighted a French start-up visa program that lets founders, employees and investors seek residence in the country.