Ground transportation entrepreneur David Litwak of Mozio makes a case for corporations to bring ridesharing services into the fold using traditional, consolidated travel purchasing strategies. The methods are familiar; it’s the will that’s missing. He argues it’s not too late.
When the major rideshare players decided to make a move into corporate travel, they came in guns blazing. They sent dozens of representatives to business travel conferences, purchased big booths to educate and enlist new companies, sought to professionalize their image from “jump in a car with a random non-vetted driver,” and dangled discounts and incentives to lock down deals that would get big multinational companies to direct their traffic towards one rideshare partner.
In many cases it was what they were told they had to do. Corporates are used to getting special discounts in exchange for directing their traffic to particular providers. It’s the entire point of the buyer-supplier relationship and much of the point of conferences like those run by GBTA and ACTE.
None of it worked and almost all the discount programs have been discontinued.
In fact, in many cases these new ground transportation providers are charging businesses more, not less, for analytics, expense integration and other add-ons, confident that clients’ employees will use Uber and Lyft anyway. They have resigned themselves to fighting over the hearts and minds, or habits, of the end employee, not the company or TMC.
This is because corporates have proven themselves unable to direct traffic when it comes to the emerging ground transportation options.
And it all comes down to their utter lack of control.
While Concur, KDS and other online booking tools are busy regulating airline, hotel and car rental usage, it’s still the Wild West when it comes to giving corporates the ability to set rules and regulations for ground transportation.
If companies or TMCs want to change this, they need to start using their influence.
We believe there are two distinct ways you can start.
1) Insist on centralization. I acknowledge this is self-serving, and I’ll elaborate on the benefits below, but the mobility market is too fragmented to tackle alone. Corporates and TMCs need one partner to stitch it all together.
2) Enforce policy. Even if they close an official deal with one rideshare competitor, companies are rarely willing or able to regulate usage through policy. These bookings come directly from employees using their preferred apps. Companies rarely take a stance to refuse expense reimbursement for whichever provider travelers use. Put real teeth behind your policies by refusing to reimburse for services with non-preferred providers.
We see three chief benefits from exerting more control through centralization and enforcing policy: coordination, compliance and cost savings.
1) Coordination: Companies need to make sure all their touch points are in sync. Does a booking made with a traditional black car provider by a TMC agent on a desktop appear on your exec’s personal mobile app? Does a rideshare booking by an employee sync to your expense system? What if it’s done through the rideshare app? What about through the TMC’s app? Does the executive assistant booking a ride for his or her boss have access to the same content that the TMC negotiated?
2) Compliance: Certain rideshare partners operate in legal gray areas in various countries. We know of one that doesn’t pay VAT taxes in a certain country because it claims it does not have a physical presence. The country disagrees. A major bank refuses to use that rideshare firm in that country as a result. We can’t expect employees to remember specific regulations like that. Some rideshare platforms only operate taxis in certain countries that banned their more unorthodox services; are you okay with putting your execs in taxis? Uber is notorious for operating in gray areas in some markets, but does your company or TMC want to?
3) Cost savings: If you can turn off an option in your system and promote an alternative, it gives your company or TMC much greater buying power. You don’t have to inconvenience your employees to change their behavior — different transportation options just appear in the app they use on a daily basis already. Middlemen also are working on features that will show travelers the cost savings of alternative forms of transportation
Like for any other travel supplier category, when companies prove they can move traffic, financial incentives will follow.
Otherwise, Lyft, Uber and others will continue to disengage, and companies and TMCs can expect their leverage to evaporate.
• With Ground Transport Technology In Flux, Where Is A Travel Manager To Begin?
• Caveat Emptor: ‘Hidden’ Fees Are A Ground Transportation Industry Fixture
• Chasing Lyft And Uber, Ground Transportation Industry Pools Resources
• Adelman, Deem Support Enterprise’s Expanded Small Business Offering
• Mobile App Maker ETA Inc. Experiments With User Pricing In Bid To Be Cheapest Indirect Unmanaged Business Travel Channel