Gulliver | Driving good service

Uber is now more popular than taxis or car rental with business people

By B.R.

BUSY executives, it seems, are getting better at sharing. Every quarter Certify, a business-expense software firm, collects data from millions of travel-expense claims in America in order to spot market trends. If there has been one story this year, it has been the incredible rise in the proportion of business travellers using Uber. Within the space of 12 months, the car-sharing service has gone from having the lowest share of “ground transportation” journeys, when compared with regular taxis and car rentals, to the most (see chart).

There is no reason to think that Uber’s ascent will stop anytime soon. In fact it is baffling who would prefer to hire their own car nowadays, with all that hanging around at the airport and bothersome paperwork, not mention having to find somewhere to park in crowded cities. The only reason to drive yourself would be when a business trip involves travelling between cities. Equally, taxis also tend to be more hassle. They, too, can involve joining a long queue outside the airport. Oftentimes they won’t accept credit cards; always they are reluctant to give you change from your $50 bill. On nearly every aspect, Uber is superior. If there is a downside, it is that airports still sometimes make it unnecessarily difficult for drivers to pick up their fares, occasionally necessitating a shady rendez-vous in a car park. Airport operators should be more encouraging.

Whether other parts of the “sharing economy” will also usurp their established competition is more debatable. Growth in the use by business people of Airbnb, a house-sharing service, was 259% in 2015, according to Certify. Yet many firms’ travel managers are wary of it. A survey last year by the Association of Corporate Travel Executives found that over half of firms have ruled out alternative suppliers of accommodation such as Airbnb in favour of traditional hotels. The main reason they cite is their “duty of care” to employees. Because sharing-economy firms are less regulated, they are viewed as posing more of a health-and-safety risk. Consequently, it also leaves employers more open to lawsuits when an executive trips down some poorly lit stairs.

But Airbnb may face an even greater stumbling block to wider acceptance. For it to dominate in the same way as Uber it must counter another trend among travel managers. To keep a lid on costs, many are becoming more insistent that travel is booked through firms’ own travel systems. Central office will tend to be more conservative for the aforementioned reasons. And while an Uber car will be booked by the road warrior on the ground, as and when it is needed, a hotel is nearly always booked in advance. Still, the more that executives ask for it—or indeed just go ahead and book it themselves—the quicker it will be accepted.

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