Uber and Lyft: How Do They Fit Within Your Corporate Travel Program?

For the first time, the ridesharing economy has overtaken taxi services in terms of ground transportation expenses in business travel as of the third quarter of 2016, according to a report by Certify. In the second quarter of 2017, Uber claimed 55% of ground transportation expenses overall while Lyft continues to grow with 8% of category receipts and expenses. This trend of choosing ride-hailing services over taxis and rental cars continues with corporate business travelers, but it’s important to examine how to take services such as Uber for Business and Lyft for Work into account before integrating them into your travel policy.

Benefits of Ridesharing

Ridesharing provides more options for busy travelers and highly-competitive global businesses. But what makes it attractive to employees and businesses alike?

Ridesharing saves time. Employees who utilize ridesharing apps can avoid long taxi lines and enjoy the benefits of transportation on-demand. Scheduling an Uber or Lyft ride requires just a few taps and swipes on your phone. This convenience increases productivity for employees and their travel managers.
Ridesharing has higher satisfaction ratings than taxis. Online survey results have shown that ridesharing services typically receive better ratings in consumer satisfaction than taxis or car hires, which makes these services all the more appealing when considering the traveler experience.
Ridesharing reduces travel spend. Services like Uber and Lyft are typically less expensive than taxis or sedan services. According to Uber’s website, businesses find that Uber is 40% less expensive than taxi services, and employers can save up to $1,000 per employee by utilizing their service.
Ridesharing services can be integrated with business travel management systems. Uber and Lyft’s apps seamlessly integrate with current travel management software systems like Concur. This allows business travelers to access and integrate each ride with their travel itinerary, saving time and increasing productivity. Corporate accounts can be merged with the ridesharing apps, allowing expenses to be applied to the appropriate department or project in real-time. This also reduces the need for employees to use their personal credit cards and file expense reports — thus increasing overall control of T&E budget management.
Uber for Business contributes to travel policy compliance. Specific to Uber, this feature “red flags” a potential travel/ride option if it doesn’t comply with your travel policy. This service addresses the issue of traveler compliance, which reduces the headaches, added expenses and extra work involved with reimbursing out-of-policy trips.

Challenges with Ridesharing

After reading through the list above, it’s hard to ignore the benefits of ridesharing. Why wouldn’t your business want to be involved in this transportation revolution? As with every “next best thing,” travel managers need to be aware of and understand the challenges that come with using ridesharing services.

Prices for ridesharing services are not always consistent. Look at “surge pricing” as a factor when determining the cost of ridesharing services. During high-demand periods, the pricing can be doubled or even tripled for one ride. This inconsistency in pricing poses budget management problems, reducing control and limiting predictability in expense reporting.
Insurance and liability are still in question with ridesharing businesses and drivers. Both Uber and Lyft provide liability insurance for their drivers, yet because of the lack of regulation of ridesharing services in some cities, businesses may still take the brunt of costs in case of an accident. This poses a risk and should be taken into account when determining the use of these services.
There’s potential lost savings from preferred vendors. Black car services and rental car agency contracts already established in your travel policy may still present the best financial option for your traveling employees. When your travelers choose Uber or Lyft instead, expenses may increase and travel policy compliance is compromised.

Decide if Uber and Lyft Should be Included in Your Travel Policy

The best way to integrate ridesharing services into your travel program is to assess how they align with your travel policy based on your company’s business travel goals. In order to determine if Uber and Lyft are a good fit, you will need to:

1. Gather feedback from your road warriors and travel stakeholders to determine how and when these services are used, both personally and professionally.

2. Assess the potential risks and benefits of including these options for travelers. Speak to your legal department to ensure liability is appropriately communicated with leadership and employees. A thorough risk assessment can improve control and increase traveler compliance with your policy guidelines.

3. Consider the cost of ridersharing providers and compare these with your list of preferred vendors. You may determine that there is room for all of these options within your policy. If so, clearly communicate when and how each service should be used to your business travelers to ensure policy compliance.

Once you’ve determined your relationship with ridesharing services like Uber and Lyft, develop a travel policy that effectively addresses these services as well as additional preferred ground transportation vendors. Your travel policy will work to guide employees’ decision-making, create a seamless process for reporting transportation expenses, and contribute to overall employee compliance.