Sources: Uber For Business Premium Isn’t Worth It

By | January 19, 2017

[UPDATE, April 18, 2017: Uber for Business now lets users request and pay for rides for others. The account is centrally billed. Uber business clients access the “Central” service dashboard via tablet or computer. They can request multiple rides for fellow employees, customers or others. Those riders do not need to use the Uber app or have their own Uber account. They’re connected to driver via SMS messaging or phone calls. A limited “demo” is available to standard Uber for Business accounts; regular use of Central requires an upgrade to the Premium tier.]

Since launching a “premium” tier within the Uber For Business program last summer, the ride-hailing giant increased its fee to 10 percent from 5 percent of spending. The fee for the higher level of service puzzled several corporate travel managers, who said under the condition of anonymity that they’re not interested in all the included features.

The standard Uber For Business program hit the market in 2014 and added elements last year. It includes integration with some expense systems and basic dashboard reporting. Employees from enrolled accounts can pay with individual corporate cards or through a centralized payment process. Admins can manually flag trips that appear to violate company policy and designate managers to approve trips. Policy controls allow accounts to limit the locations and time periods in which employees can request rides, and to decide if employees must use an expense code for each trip.

According to the Uber website, added features in the premium level include bulk employee management, downloadable custom trip reports, custom expense codes, code synchronization and recurring reports. Employees can, if need be, correct payment info and justify their rides. There is no minimum spending requirement for the premium program. Uber notes that “alternative payment options” are available for “large” companies.

Uber

Image: Reuters/Toby Melville

According to an Uber contract template obtained by The Company Dime, the premium tier also includes “rich trip data,” a monthly billing option that consolidates all payments, automated trip flagging that uses “machine learning” to identify noncompliant rides, access to the Uber For Business trip data API and integration with the International SOS Travel Tracker for risk management purposes.

Current and potential clients expressed resentment and even shock that they’d be asked to pay for the opportunity to shift business to Uber, even if the premium service includes some beneficial items.

The International SOS component and automated policy audit appeal to some buyers. But the better reporting touted by Uber for premium accounts may be redundant for those getting good enough data from their payment and expense processes. Travel managers at a few large companies said central billing isn’t a big draw for them.

DK Consulting Group CEO Dave Kilduff said the duty of care aspect is a nice feature, but the enhanced reporting would be lost on most people. Reviewing ground transportation spending data, he said, is a pretty low priority.

Kilduff also said he understands why Uber levies a fee for the premium service. It costs money to integrate with accounts, furnish detailed reports and connect with International SOS, he explained. “But that doesn’t mean I would pay it,” he added.

Sources said the 10 percent is negotiable. Some have achieved low-single-digit percentages. That’s still a big number for companies that use Uber a lot.

Travel managers also took exception to an exclusivity clause in Uber’s contract language. According to the contract template, the customer “agrees not to refer to any Uber competitor as a ‘preferred travel partner.’ ” It defines a competitor as “an entity engaged in the provision or facilitation of on-demand ground transportation services.” The “provision” part is interesting because Uber repeatedly insists it’s not such a provider, even including a contract clause stipulating that the customer acknowledges as much.

Asked to review the contract, Kilduff pointed to what he described as “overly broad” clauses that essentially give Uber first right of refusal for lots of the client’s transportation needs.

“Company will work with Uber to identify certain initiatives to solve company’s transportation needs which may include, without limitation, guaranteed rides home from work programs, employee commuting, ground transportation for prospective employee travel, or ground transportation for corporate events,” according to the template. “Prior to discussing such potential initiative(s) with any third party, company shall provide Uber notice of its intention and company will negotiate terms for these proposed programs with Uber in good-faith for at least thirty (30) days before negotiating with any third party.”

“If I were a corporate travel manager, absolutely I’d say no,” Kilduff said.

“My clients have balked at both the exclusivity and premium clauses,” according to Bill Knepper of GoldSpring Consulting. “The general feeling is that unless the rebate is substantial (and to date it has not been), why eliminate Uber or Lyft over the other one? Additionally, the whole concept of paying for Uber’s premium service just sits wrong with travel managers. They don’t have to pay a premium in any other ground transportation segment and they aren’t about to pay for Uber’s.”

The rebate Knepper referred to is paid to the client based on how many users it enrolls after signing a deal.

According to the contract template, the rebate is available in the standard program, which has no added fees.

In September 2015, Uber said more than 50,000 companies enrolled in Uber for Business. That’s the same number cited by Travis Bogard, who joined the company last summer as global head of Uber Enterprise, in a December 2016 post. “We expect those numbers to at least double by the middle of [2017],” according to Bogard.

While general grumbling about Uber’s bumptious ways continues, some buyers said the company lately has been more flexible. They said that in addition to negotiating the premium service fee for some companies, Uber has in some cases backed off the exclusivity requirement.

Uber did not respond by presstime to a request for comments.

Related:

Accenture Plans To Endorse Uber For Employees

Willing To Negotiate, Lyft Cultivates Friendly Image

Ground Transportation’s Battle For Convenience

Despite Concerns, Uber Is Winning

 

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About David Jonas

David in 2006 co-founded business media firm ProMedia.travel after ten years as a journalist with Business Travel News. David rejoined BTN in 2010 as executive editor when its parent company acquired ProMedia, and in 2014 co-founded The Company Dime.