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Is Ride-sharing Right for Your Corporate Travel Program?

Ride-sharing services are a study in explosive growth. When Uber, the first large-scale ride-sharing service, launched in 2010, it was restricted to San Francisco and cost one-and-a-half times more than a taxi, according to Business Insider. By the next year, it had spread to multiple cities, had an app, and advertised itself as “Everyone’s Private Driver”. By 2013, Uber was advertising itself as a global service for all types of riders, but not necessarily business travelers. That would come in 2014, with the launch of Uber for Business.

Growth and innovation have followed the industry. Along the way ride-sharing services have attracted multiple entrants: Sidecar in 2011 (now defunct), Lyft in January 2012, taxi-pooling app Curb in 2014, China’s Didi Chuxing in 2015, Southeast Asia’s Grab in 2011, and India’s Ola in 2010.

Altogether, ride-sharing companies have created an industry with more than 9 million users and $3.3 billion in revenue in 2015, projected to grow to $6.5 billion in 2020. A good portion of that growth is expected to come from business travelers in North America. According to the latest GBTA Business Traveler Sentiment Index™, ride-sharing services are now allowed by 50 percent of corporate travel policies, a climb from 44 percent in June. Additionally, ridership among business travelers increased 21 percent and a majority of travelers anticipate using these services about the same (71 percent) or more (18 percent) in the three months following the survey.

Similarly, Certify’s Business Travel Ground Transportation Report for Q1 2017 states that Uber now represents 53 percent of business-traveler transportation receipts and tops the list of most-expensed brands. So regardless of whether your company has incorporated ride-sharing into its corporate travel program, it’s very likely that your travelers are utilizing this service.

However, growth has not come without bumps. Ride-sharing services have been banned in many states, cities, and countries, including Denmark, Italy, Hungary, Alaska, Vancouver, and Austin, Texas, according to Condé Nast Traveler. More than 8,000 ride-share drivers in Massachusetts were recently pulled off the road after failing a state background check, which does little to help ride-sharing providers’ alleged 90-plus percent driver-turnover rates. There are many stories of ride-share drivers committing crimes, with the most recent involving New York drivers using their cars to run a drug ring.

Not surprisingly, there has been much conversation about risks associated with ride-sharing services. Some of these risks mentioned include:

  • Consistent global product/service delivery: Much has been made of ride-sharing provider absences from several key markets, including China. However, many of these markets have ride-sharing services of some sort, and transportation inconsistencies from country to country have long been common.
  • Safety/security: While violent incidents involving ride-sharing services attract headlines, in the aggregate these services appear to be at least as safe as taxis, especially in foreign countries.
  • Business practices: The ride-sharing industry certainly has room to grow and mature. Discriminatory, exploitative, and predatory business practices will not serve it well with corporations. However, ride-sharing companies have added some very slick services around driver and vehicle identification, route planning and car-tracking services that can help companies ensure their passengers are safe.
  • Insurance: Debate still exists whether insurance coverage for ride-share drivers has been sorted out with regard to their passengers. Several of the larger ride-share companies’ company-provided insurance works while the app is on; supplemental insurance is sometimes offered by many major carriers, including Geico.
  • There hasn’t been a real litmus test court case around the duty-of-care concerns with corporate travel policies and their incorporation of ride-sharing services.

While not an exhaustive list, those responsible for their company’s travel management programs would do wise to research and address the items discussed above when making decisions to include or exclude ride-sharing vendors. At GBTA Convention 2017, we’ll be hosting a session entitled “To Ride or Not to Ride? Can Corporate Travel Programs Go Global and Stay Safe with Shared Economy Ground Transport Services?” The session will include four panelists representing those with real skin in the game and various sides of the debate. Join us on Wednesday, July 19 at 11:30 a.m. in Boston.