Ground Transportation: The Rideshare Impact

By Bill Knepper, Senior Consultant

With over 20 years of experience in the Travel Industry, rarely have I seen such rapid changes in a travel segment. Rideshare virtually didn’t exist five years ago, but then Uber burst onto the scene and everything changed. The grassroots acceptance of Rideshare has forced travel managers to come to grips with a ground transportation alternative that provides cost savings and convenience for their travelers but also comes with duty of care concerns.

Rideshare Growth:rideshare-chart

According to the expense software company Certify, Rideshare had a greater market share than taxis by mid-2015 and now trumps even car rental in the ground transportation segment. The upward trend in Rideshare continues as Uber and Lyft rapidly add new features like easy enrollment in their corporate program, automated expense reporting, and separation of business and personal profiles.

Not Without Bumps Along The Way:

While Rideshare companies have struggled with regulatory restrictions to operate in numerous markets, they appear to be steadily overcoming them one by one. On April 22 of this year, Uber CEO Travis Kalanick announced that Uber settled two class-action lawsuits in Calif. and Mass. for up to $100 million, which will keep Uber drivers as independent contractors (a significant cost savings for Uber over requiring their drivers become employees). In a separate settlement, Uber has agreed to allow drivers to accept tips, something they rejected in the past.

How Travel Managers Are Addressing Rideshare Today:

The vast majority of Travel Managers we surveyed have yet to address Rideshare in their policy, but accept that their travelers utilize these services daily. The concern is that, while taxis operate in a regulatory environment with corporate ownership, Rideshare vehicles are owned and operated by individuals. Even with Uber’s $1M blanket liability policy, travel managers are reluctant and unsure how to address Rideshare in their travel policy. There is additional concern regarding vehicle safety and driver background checks, which are less stringent than those of taxi providers.

Looking Forward:

First and foremost, evaluate your current travel policy to see how Rideshare is addressed. Meet with your risk department and partner with them to craft policy that addresses the needs of your company and duty of care. If your company is not ready for an official policy, consider drafting SOPs for your travelers such as “does the vehicle look safe”, “does the car and face match.” As Rideshare volume is significant and continues to grow, the time to address it head on is now.

 

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