Special report: Ride to nowhere?

Despite the huge success of hail-a-ride providers, many travel buyers still feel they are not right for corporate policies

June 2017 marked the fifth anniversary of the founding of Lyft, the San Francisco-based, US-centric ride-hailing app. It also marked the end of Transport for London’s consultation period on proposed changes to the fees it charges minicab drivers.

For Uber, June was what the Queen might have described as a ‘mensis horribilis’ – not that, as far as BBT is aware, Her Majesty has ever sought the services of, or employment as, a minicab driver.

Uber’s ‘horrible month’ – and there have been a few – includes the prospect of having to cough up more than £2 million to license its 30,000 London-based drivers for the five years from September. Its previous five-year licence, extended for four months in May this year, came to £2,826.

But that’s just in London. Uber chief executive and co-founder Travis Kalanick faced mounting pressure following publication of a highly-critical internal report on his company’s culture.

Former US attorney-general Eric Holder was hired to investigate after software engineer Susan Fowler alleged that her complaints of sexual harassment at Uber were ignored. On June 11, Uber’s board of directors unanimously agreed to accept Holder’s recommendations. On June 21, Kalanick resigned.

Uber has been valued this year at nearly US$70 billion. Meanwhile, Jaguar Land Rover subsidiary Inmotion Ventures recently bought a US$25 million stake in Uber rival Lyft, as part of the US$600 million fundraiser that values the company at US$7.5 billion. 

Despite Uber’s various troubles, it’s pretty clear that the firm has spearheaded a significant change in consumers’ expectations and habits around the world when it comes to using taxis.

Gone are those freezing February evenings when forlorn figures on Oxford Street (or Times Square or Place de la Concorde) peered myopically through the drizzle in the hope of hailing the only-available taxi before some sprightlier cab-flagger jumped the informal queue.

The new way
These days, ride-hailing apps mean the driver comes to the client, rather than the other way around, he doesn’t have to be asked to stop off at a cash machine, and he won’t baulk at driving south of the river (Thames, Hudson, Seine…). It’s hardly surprising that business travellers love them.

At first, travel managers veered between the somewhat sceptical and the downright horrified. Citing duty-of-care considerations, they rightly questioned the quality controls on the type, state and reliability of vehicles; the qualifications and suitability of the drivers; the insurance implications, and much more.

Somewhat incongruously, some travel managers also argued that the rise and rise of ride-hailing services appeared to erode their traveller-tracking abilities – which is a bit like saying that an employee can’t use the London Underground, let alone take a bus, because their precise location cannot be pinpointed.

The app-based service providers’ response was impressive. More than 15 of them – including the likes of Cabfind, Addison Lee and partner Tristar, Groundscope and Uber – exhibited at last February’s Business Travel Show, indicating a clear ambition to meet the needs of the corporate travel community and assuage its fears.

Inclusion in policies 
Faced with a quality product coupled with high traveller demand, travel managers are overcoming their earlier qualms. In January this year, a GBTA (Global Business Travel Association) survey – conducted in partnership with American Express – suggested that 50 per cent of corporate travel policies now allow employees to use ride-hailing services.

This was up from six months earlier, when 44 per cent of policies gave the green light to the use of the likes of Uber, Lyft and others.

The findings, based on a poll of more than 3,200 corporate travellers from Australia, Canada, Germany, Hong Kong, Japan, Mexico, the UK and the US, also indicated that the number of road warriors using ride-share suppliers had increased by 21 per cent over the period.

It doesn’t take a mathematical genius to work out that if 50 per cent of policies permit the use of ride-hailing apps, 50 per cent don’t – at least not yet. There are duty-of-care concerns, mostly centred on Uber, which has come in for all sorts of criticism. There are also questions about the availability and reliability of the management information that service providers can offer, and wider ethical issues around the way drivers are treated.

This has opened the door – at home and abroad – to companies which make a point of meeting travel management requirements. 

Robert McGinn, commercial director at Addison Lee, claims his company was the first to launch a car-booking app in the UK, but welcomes new competitors.

“A combination of new entrants and technology has made for a customer-focused, dynamic marketplace – which, when properly regulated for a level playing field, is good for consumers, the market and the economy,” he says, adding: “Addison Lee identified that what corporate travel buyers and their clients want is the convenience of app-based travel booking, integrated into a global business offering.”

Perhaps it’s just as well that McGinn is open to a spot of rivalry. Cabfind claims to have the UK’s most extensive private hire and executive car network, with 2,300 suppliers – with a combined fleet of more than 160,000 vehicles – on its books.

Gett, which claims to be ‘number one in Europe’, covers London and eight other UK cities, has a base in New York, and serves multiple cities in Israel and Russia. German-based Mytaxi, which absorbed the Hailo brand, claims to offer the first taxi app with access to more than 100,000 taxis worldwide.

It doesn’t stop there. In Europe, Snappcar is challenging Mytaxi. In the US, Uber’s archrival Lyft is facing increasing competition from Curb. Brazil’s 99 has recently received a huge cash injection and is expanding rapidly.

China’s leading ride-hailing app Didi is now available in English. Line Taxi has overtaken Uber as Japan’s biggest provider, covering more than 90 cities, while Ora is challenging Uber in India. GrabTaxi has an extensive network covering Thailand, Malaysia, the Philippines and Indonesia.

Business needs
However, as Groundscope chief executive officer John McCallion insists, that’s only part of the story.

“In business travel in the ground transportation sector, travellers require an easy-to-book, cost-effective and reliable service that they can book the night before travel and go to bed knowing that they will be picked up at 5am and delivered to the airport on time, and collected at their arrival airport in the US or Europe on time.

The business traveller does not want to pay cash in the car or have to worry about where the driver will meet them upon arrival at a foreign airport.

“Uber is like the KFC of the restaurant world, in that it provides a service in central London and New York, but not one that particularly meets the needs of the corporate traveller. First, Uber is not cheap – for any trip longer than 30 minutes it is actually more expensive than a taxi – and, second, it does not meet the needs of the corporate traveller or the corporate buyer.

“Corporate buyers want discounted rates, free waiting time at airports (particularly if the flight is delayed) and greater security. The other key requirement from corporate clients is their need for detailed management information on taxi spend.”

Craig Chambers, TBR Global Chauffeuring’s chief executive, says that a shift in the travel market over the past year or so, with the increased use of app-based car providers, has brought corporate social responsibility into the spotlight.

“While,  traditionally, the focus has been on airlines and hotels, with increasing uncertainty in the world, businesses are acutely aware of the importance of being able to track their travellers’ full end-to-end journey and avoid them being ‘unaccounted for’ when they jump in a local taxi,” he says.

“As well as guaranteeing a licensed vehicle and a disclosed, professional driver, by ensuring a managed travel policy is in place leakage can also be reduced, so it makes good financial sense, too.”

Travel buyer attitudes are changing along with Lyft’s fortunes and Uber’s corporate culture. Maybe this will turn out to be an ‘annus mirabilis’ after all.   

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