Business travellers are keener on the sharing economy than their employers

But travel managers are adapting their policies

RIDE-HAILING apps and home-rental sites are fast becoming mainstays of the corporate travel world—but perhaps not quite as fast as many business travellers would like.

Two recent reports shed light on the rapid changes taking place within the industry. One comes from the Global Business Travel Association (GBTA), which represents corporate travel managers. Its latest survey found that the number of businesses allowing their employees to use ride-hailing services such as Uber and Lyft has increased by nearly 15% since June. Over the same period, the share permitting workers to book lodging through Airbnb and similar services increased 20%. Yet despite that growth, half of corporate travel policies still don’t explicitly allow employees to use ride-hailing apps, and 70% make no mention of using home-rental services.

At first glance, those figures appear at odds with a survey released by Certify, which makes software that tracks business-travel expenses. It found that in the final quarter of 2016, Uber accounted for 52% of “ground transportation” expenses, the first time that it has captured the majority of that market. That compares with 40% during the same period in 2015. Its main rival, Lyft, saw its share double, to a more modest 4% of all rides. Rental cars (33%) and taxis (11%) account for the rest. Indeed, Uber is now the most-expensed vendor across all categories, ahead of Starbucks, Delta, American Airline and (bizarrely) Amazon.

Why the discrepancy? How can most business travellers use ride-hailing apps when only half of company policies allow them to? First of all, the Global Business Travel Association surveyed travellers in eight countries, from America and Mexico to Germany and Japan, while Certify looked only at the United States. But the reports also hint at a rising tension between what companies allow and what employees want. Given the choice, it is clear that a growing number of business travellers opt for services like Uber and Lyft. Those who are self-employed or work for small companies without explicit travel policies may be even more keen users of the sharing economy. One reason for that is cost. The average expensed ride in the fourth quarter of 2016 was $24.75 on Uber, $24.99 on Lyft, and $34.62 on taxis.

Interestingly, this tension doesn’t seem to exist when it comes to lodging. According to Certify, just one-quarter of 1% of lodging expenses were for Airbnb properties in 2016. That will probably grow quickly: the firm says that it “expects Airbnb could approach the top 15 most expensed hotels sometime late next year”. But that is still a far cry from the dominant market share that Uber now enjoys—or even from the 30% of businesses that allow Airbnb bookings.

Airbnb, though, is fighting hard for the commercial market. Business bookings on the site shot up last year and now account for 10% of its business. Traditional hotels obviously believe it poses such a threat. Many are starting to ape it.  Marriott, for example, is experimenting with apartment-style suites in its properties order to compete with home-sharing firms.

What seems clear is that a lot of employees are ignorant of their firms’ travel policies. Another recent GBTA survey found that 24% firms allowed the use of ride-hailing apps, but just 12% of travelling employees believed it was permitted. As travel policies are updated by firms they will almost certain make increasing use of these new platforms. The more that staff cotton on to this, the happier they will be.

Sourced from: http://www.economist.com/blogs/gulliver/2017/02/ta-ta-taxis-hasta-luego-hotels

To read Tshipi Alexander’s view on /Balancing the pitfalls and benefits of the sharing economy – Travel and Meetings – Click here

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