The Entrepreneur Driving Mexico's Ride-Sharing Evolution
WHY YOU SHOULD CARE
Because her business savvy may help save the planet.
By Jose Fermoso
For being one of Mexico’s hottest young technopreneurs, Cristina Palacios comes across as pretty old school. The co-founder of Aventones, a ride-sharing startup that was recently gobbled up by a global giant in the game, Palacios lives with her parents in a home outfitted not with flat-screens and smart systems but with antique furniture and paintings. She’s single and just out of her 20s, but doesn’t go for the Tinder-driven dating scene. “I like love stories,” she says, “and Tinder isn’t conducive to that.”
Fortunately for her investors, Palacios brings plenty of cutting-edge thinking to Aventones — Spanish slang for hitchhiking — one of Latin America’s most successful transit startups. The service, which facilitates intercity car pools for business clients like corporations and universities, now has 80 partnerships in five countries and seen more than $21 million in investment, including from big-time Latin American accelerator NXTP Labs. Earlier this year, Palacios and partners Alberto Padilla and Ignacio Cordero sold Aventones to one of the biggest ride-sharing companies not named Uber or Lyft: France’s BlaBlaCar. Palacios’ success has made her a notable in both tech and conservation in Mexico, and Aventones has joined a growing list of alternative transit hits in the developing world, from Joe Lee’s multibillion-dollar taxi-hailing giant, Didi Kuaidi, in China, to Bangalore, India–based Uber rival Ola.
With BlaBlaCar, Palacios’ making-green-by-going-green ride-sharing model is expected to expand through much of Latin America.
BlaBlaCar, like Aventones, employs a ride-sharing model different from Uber’s. While the latter competes with the intracity taxi industry, BlaBlaCar takes on intercity transportation such as trains and private cars. With 80 percent of city-to-city travel in Europe done by car, BlaBlaCar has tapped a built-in market there, claiming 20 million users while taking 10 percent of the cost of each ride. As a BlaBlaCar business development lead, Palacios expects to bring her making-green-by-going-green model to potentially millions more users in Argentina, Brazil and Chile, for starters. BlaBlaCar chief operating officer Nicolas Brusson said the Aventones acquisition would help “drive BlaBlaCar’s continued international growth.”
Palacios hit on the idea for Aventones in 2010, a year when Mexico City’s horrendous traffic made the air unsafe there at least one out of every three days. Ivan Zavala, a partner in accelerator TechBA, says her pragmatic thinking kept the young company afloat. An example: Before Aventones had an actual platform, much less a functioning app, Palacios landed mega-retailer Costco as the company’s first major account. She steered the service toward a business-to-business model, even when most buzz was around peer-to-peer. Her reasoning: Mexico lacked a fully developed digital payment ecosystem; working directly with companies guaranteed income.
Palacios has always been practical-minded, friends say, even as a kid. The daughter of Mexico’s former ambassador to Egypt (where she was born), she traveled extensively as a child. So when her parents decided to pack the 11-year-old off to boarding school in Britain, she took the move in stride, upsetting her mother not just by her lack of tears at their airport farewell but also by telling her: “Get it over with, ya!” Palacios sounds little different when she explains how she decided on her entrepreneurial career, summing up her brief spins through the worlds of high finance and nonprofit do-gooding as too much “bullshit.”
Aventones’ success belies the fact that startups in Mexico, even in 2015, face a tough road. The country lacks a significant tech industry network and has an underdeveloped investor class, says Gabriela Mejia, a fellow entrepreneur. Its “moneymen” generally don’t like to toggle between ideas and industries the way, say, Elon Musk moved from eBay to Tesla, Mejia says. That means some potentially great products never get off the ground. Aventones, though, drew both private and government investment. It was chosen for a grant from a state-funded accelerator in 2013 from among 600 competitors.
Palacios’ new role with BlaBlaCar will likely cut into the already precious time she has for her private life. She’s a dedicated runner and a foodie, cooking chilaquiles for friends and tasting artisanal mescals. She spoils her two rescue dogs, letting them up on the fine furniture at home. And though she doesn’t usually have time to multitask romance into her life, she’s currently dating, Tinder be damned. As far as her new business relationship goes, the road ahead looks smooth — with one potentially big bump. Thilo Koslowski, an analyst with tech researcher Gartner, says the success of ride-sharing options like Uber and BlaBlaCar will “probably lead to a 20 percent drop in vehicle ownership” in places like Mexico in the next few years. But he also warns that in the long term, ride-sharing will face a tough battle with the next big alternative: self-driving cars.
But BlaBlaCar is making moves that could ward off those Silicon Valley beasts for some time. One is buying up competitors around the globe; another is snapping up talents like Palacios. And while she expects to stay with BlaBlaCar for some time, she’s already looking into other business opportunities that could have a beneficial impact. She and partner Cordero recently launched two side startups, including one called Disculpe Doctor, to connect patients and doctors 24/7. “In Mexico, there’s so much inequality, disorder, but also opportunity, that you just want to make a difference,” Palacios says.