The Sound of Silence: Travel Policy on the Sharing Economy

CB-0815By Colleen Black, Partner

There’s no denying the impact that the sharing economy has had on business travel, from how we get from Point A to B, to where we stay when on the road. Five years ago, sharing a car with a stranger hailed using your smart phone seemed an odd concept; today, spending on rideshare services such as Uber and Lyft have overtaken the rental cars in the ground transportation sector.

Despite our comfort with the sharing economy on a personal level, the phenomenon remains an issue for managed travel programs. With multiple concerns to take into account such as regulations, licenses, and liability, the sharing economy it’s no wonder that many travel managers are proceeding with caution in this area.

Your Friend with a Car, or a Liability?
In our recent survey, 68% of respondents said their travel policy is silent when it comes to shared economy ride services such as Uber and Lyft. Although this may seem high, consider our results from a survey we conducted last year that asked the same question, where 96% of respondents said their policy was silent.

Back to our recent survey, 12% of respondents said shared economy ride services are permitted under policy. Of those, nearly half responded that it is allowable because “travelers are doing it anyway.” For those that indicated the services are not permitted under policy, an even 50/50 split said it was due to “company culture” and “safety risks.”

The bottom line: despite the 28% shift in respondents now addressing shared economy ride services in their policies compared to last year, the number that are silent remains substantial.

“Don’t Go There. Live There.” (Unless You’re on Business)
I admit, the latest Airbnb commercial really piques my interest (if you haven’t seen it yet, you can here). “I’m a saavy traveler,” I think as I watch it. “I want to live in that flat in Paris.” Alas, corporate travel policies are much more direct in dealing with shared economy lodging services, like HomeAway and Airbnb, than rideshare, and they are not as friendly to the idea overall.

Of our respondents, 23% said their policies formally do not allow travelers to make use of these services. While a significant portion said their policies remain silent (53%), that is decidedly less than those who indicated their policies were silent on shared economy ride services. Only 4% said shared economy lodging is formally permitted in policy.

So… Is Silence is Golden?
The temptation of remaining silent on shared economy services in your travel policy is understandably appealing. Leaving these services unaddressed allows travel managers to investigate the suppliers further, do research, and let travelers who enjoy the services use them, which keeps them happy.

The danger in not addressing these services in your policy directly, however, far outweighs the benefits. Refraining from spelling out what is and is not allowed in terms of shared economy services equals implicit compliance, opening up your company to any regulatory, licensing or liability issues that may arise.

Instead of allowing shared economy services to go unaddressed, we recommend meeting with security and risk management, human resources, legal and other relevant stakeholders in your company to address these services directly. Be prepared for the meeting with statistics on safety records, insurance and liability issues and comparison data that you can get from the shared economy companies. Whether you choose to allow the use of shared economy services or disallow, we recommend some language in policy that states that this does not imply any endorsement or non endorsement of other carriers. By directly addressing shared economy services, you will not only help insulate your company against potential liabilities, but will improve your program by eliminating this gray area and reducing associated confusion.

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