Uber vs. Lyft: Which is Best for Your Corporate Travel Program?03/17/2017, 11:58 am

The sharing economy presents a myriad of choices for everyone, especially travelers. Websites like Airbnb have dramatically changed how consumers look for places to stay while traveling, just as ridesharing services like Uber and Lyft have transformed the speed by which people get from one place to the next.

Businesses are also impacted by these services. In this blog we will talk specifically about Uber and Lyft. These services — at first ignored by businesses used to taxis and car hires — are staking their claim with corporate business travelers by expanding their services through platforms like Uber for Business and Lyft for Work.

The trend towards increased use of these services makes sense considering convenience and appeal to millennial customers — both personally and for business. An article from the New York Times stated, “The business travelmarket seems ripe for the kind of disruption that has transformed retailing, entertainment and other areas, offering technological solutions to make cumbersome transactions more intuitive and seamless.” Business travelers have slightly more complex demands, yetcompanies like Uber and Lyft are shaping their strategy and offerings to meet those needs.

5 Benefits of ridesharing

The ridesharing providesmore options for busy travelers and highly-competitive global businesses. But what makes it attractive for employees and businesses alike?

• Ridesharing saves time. Employees who utilize ridesharing 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 servicesall the more appealing.
• Ridesharing reduces travel spend.Services like Uber and Lyft are typically less expensive than taxis or sedan services. According to Uber’s web site, 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 app, 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 comport with your business’ travel policy. This service addresses the issue of traveler compliance, reducing the headaches, added expenses and extra work involved with reimbursing out-of-policy trips.

Challenges with ridesharing

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

• Pricing for ridesharing services are not always consistent. The practice of “surge pricing,” is a factor when determining the cost of ridesharing services. According to Travel and Transport, “If Uber determines traffic to be busy and rider demand high, it will tack on what it refers to as ‘surge pricing,’ which can force rates to double, triple or in some cases surge even more. Lyft has the same add-on, called ‘prime time,’ and both companies notify users about these increased prices before they agree to a 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 to employees and businesses 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 they 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 theyalignwith your travel policy based on your company’s goals for business travel. In oder to determine if Uber and Lyft are a good fit you will need to:

1. Gather feedback from your road warriors or your travel squad to determine how and when these services are used, both personally and professionally.
2. Assess the potential risks and benefits from 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 Uber and/or Lyft 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 the how’s and why’s of using each service 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 processforreporting transportation expenses, and contribute to overall employee compliance.

How has your business adapted its travel policy to ridesharing services? Do you have any practical advice to share with our team?  If you would like additional direction on establishing a travel and expense policy, please download our Travel Policy Workbook .

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update link to DT – Travel Policy workbook landing page