Rapidly advancing technology is shaking up the previously static world of ground transport, reports Rob Gill
Ground transport used to be an unloved and largely unnoticed corner of the business travel landscape, drawing scant attention from travel buyers more focused on the twin titans of travel spend: air and hotels.
The sector is always likely to remain the bridesmaid rather than the bride when it comes to travel management, simply because of the comparative costs involved. But the rapid growth of the ‘sharing economy’ taxi providers – Uber in particular – has shone an increasingly bright light on this area of spending, especially as these services are popular with business travellers.
Recent moves have included Uber targeting London-based commuters by doubling the area covered by its ride-sharing operations, and launching operations in Cardiff, Southampton and Sunderland. Major car manufacturers have also entered the fray, with Volkswagen investing US$300 million in black taxi app Gett and Toyota forming a partnership with Uber.
These taxi apps have increasingly been targeting corporate travel – often through link-ups with expense management tools, such as Uber’s deals with Concur and Certify, or through direct marketing to individual travellers.
Uber certainly seems keen to play the corporate game from all angles – the San Francisco-based firm took a stand at this year’s Business Travel Show in London and has launched its Business Profiles feature that allows customers to separate their personal and business expenses.
Travel management companies (TMCs) are also keen to get involved: UK market leader Carlson Wagonlit Travel is piloting the use of Uber through its CWT To Go itinerary-based app, while Expedia’s managed travel brand Egencia has also integrated Uber ride requests into its Trip Navigator app.
John McCallion, CEO of technology specialist Groundscope, agrees that Uber’s emergence “has raised the profile of the ground transport sector and made it more fashionable”, as well as forcing long-established suppliers to “reassess how they need to interact with customers”.
But he adds that Uber and its contemporaries cannot offer all the transport services that corporate clients require, such as providing a meet-and-greet chauffeur-style service at an airport.
“Uber is a leisure service and does not provide all the attributes corporate clients require. For this reason, it’s had less impact on the business market,” says McCallion. “It is an on-demand service and a business traveller being collected at 5am to go to the airport wants this all booked in advance rather than getting up at 4.30am and booking a car on Uber.”
Hailo, which operates as an app for black cab drivers, has ambitions to become “Europe’s leading licensed taxi provider” and currently operates in the UK, Ireland and Spain. The company’s strategy is to offer a “transparent approach to pricing”, as well as addressing duty-of-care considerations that buyers might have about using less-regulated services.
Andy Jones, Hailo’s UK general manager, adds: “Our clients simply pay the taxi meter fare. We don’t charge for accounts, booking or transaction fees. We don’t ‘surge’ price and we don’t charge run-in costs – the cost of the journey to come and pick you up.
“We often find employees are simply left to sort out their own arrangements with little or no travel policy framework in place or guidance from their company. Unsurprisingly, employees have taken to adopt solutions that work in their private lives or simply hail cabs off the street. There is genuine and understandable concern among clients whether these solutions compromise their corporate duty-of-care towards their employees.”
As one UK-based travel buyer puts it, ground transport has always been “difficult to get a handle on” due to its fragmented nature, a multitude of suppliers and different payment methods – even with recent advances in technology, the “days of paper taxi receipts are still not over”. The fact that ground transport is often managed by a different department, outside of travel, can be another potential hurdle.
As Nigel Turner, CWT’s senior director of programme management, says: “Some companies have integrated their ground transport costs very successfully, but many have not been able yet to get their arms around the spend, requirements and controls in this area. For many companies, ground transport is an unmanaged expenditure that could return significant savings, as well as improvement to safety and security risk.”
UK private-hire firm Addison Lee has been working to improve its technology – particularly the use of travel management software to provide the type of data that travel buyers need to manage their programmes.
Chief commercial officer Peter Boucher explains: “Corporate clients need a fluid system to manage expenses and to cap spend. Addison Lee has developed travel management software that can be tailored to the needs of each account.
“Historically ground transport has never been sufficiently integrated – it has always been the missing API [application programming interface]. The hotel, airline and even rail industries have managed to do this successfully.
“No one has ever been able to do ground transport successfully. Addison Lee is providing the missing link with technology that integrates seamlessly with the client’s travel management software and expense software as a part of the booking flow.”
Roy Hughes, director at ground transport specialist One Transport, says there has been a “noticeable push” in the last few years for companies to try to integrate their ground transport programmes to save money, as well as ensuring duty-of-care to travellers.
“There are two extremes – some organisations are only just beginning to think about implementing a ground transport programme, while others are now well ahead of the game,” says Hughes.
“The taxi and private-hire industry has come under huge pressure from the corporate market to reduce and optimise cost efficiency, which the industry has reacted to through greater utilisation of technology, such as mobile apps.”
Sean McDonagh, sales director at specialist supplier Cityfleet Business, says that technology is also allowing more flexibility and choice in the type of vehicles that clients are using, as well as making it easier for them to capture this data.
“New products, such as our app and online booking tool, are helping to further improve flexibility of booking while being able to offer a large selection of different vehicle types, such as black cabs and electric vehicles,” he says.
“Booking apps allow users to book and track vehicles wherever they are in the world, 24 hours a day. This will allow clients to empower their colleagues to book a vehicle as long as the cost can be centrally attributed and controlled.”
Another major ground transport development in recent years has been the growth of car-sharing services. Stuart Birkin, director of account management at Corporate Travel Management, says car-sharing is “definitely being talked about more” as technological advances make it more practical for business travellers to use.
“The technologies are there to support this by identifying travellers arriving at a destination within a prescribed window, and then urging them to share taxis or cars,” explains Birkin. “We have introduced CTM’s Smart Taxi solution, which alerts travellers within a client’s company to when they are arriving at the same airport as a colleague, so that they can share a taxi, and thus save ground transportation costs.
“I haven’t seen it mandated in a travel policy yet, but it’s certainly an area that travel managers and procurement alike are targeting to drive savings. It helps from a CSR [corporate social responsibility] perspective, too, with potentially fewer car journeys being taken.”
Groundscope’s McCallion has also seen a trend for more ride-sharing between travellers from the same company – Groundscope added this sharing function to its online booking tool last year. “This year we have had a huge uptake from our clients and we see demand for this service continuing to grow,” he says. “It is eco-friendly and saves clients’ money. Travellers sharing a taxi split the costs equally and this is billed automatically after travel.”
But One Transport’s Hughes is not so sure that car-sharing has taken off among UK companies and says it is not being used as widely as it could or should be.
“We have a large number of corporate clients that use it, but I’d argue that take-up across the industry is not as high as it should be,” he says. “Car-sharing is the single biggest way of controlling cost and also creating genuine eco-savings. Therefore the industry should be doing more to raise awareness.”
But will this mean the end of chauffeur or executive car services? Operators in this part of the industry point out that they offer services that are not replicated by taxi operators, such as longer-distance journeys to and from UK airports, as well as providing professional chauffeur services in countries where there may be safety concerns about using local taxis.
One of the most talked about technological developments in ground transport is the ‘driverless’, or ‘self-driving’ car. Google is working on the concept and there have been persistent rumours that Apple has been doing the same. Travel technology company Amadeus has predicted that these cars will be ready for public roads before 2020.
But what impact could driverless cars have on ground transport programmes in the coming decades and will they become a cheaper option in the long-term? Groundscope’s McCallion is not sure these vehicles will become a major game-changer within the industry.
“These cars will have to be owned by a service provider, they will need to be serviced, licensed and insured as any other taxi is, and they will need to be booked in the same way, so the only real difference is that they will not require a driver,” he says.
“As in robotics, the cost of the driverless vehicle may turn out to be much higher than the cost of a taxi with a driver, with no customer service or assistance.”
The increasing use of predictive data could also become a way of making ground transport services more effective and convenient in the future, according to Hailo’s Jones. “Location data with predictive analytics could deliver a level of artificial intelligence that could transform ground transport,” he says.
“It is not inconceivable that pre-emptive allocation of taxis could be enabled by using location data and previous customer behaviour to pre-empt the need for transport and allocating this to ensure the traveller is able to continue their journey in a truly seamless fashion.”
Ground transport is finally coming into the spotlight as a vital element in the concept of end-to-end travel management. Technology may finally provide the solution to the frustration felt by many buyers as they try to get to grips with this traditionally unruly area of spending.
Case study: Global pharmaceutical company
The UK division of a multinational prescription drugs manufacturer employed Groundscope to consolidate its previously fragmented ground transport programme.
This had meant that the company had only an incomplete picture of costs and data, as trips were being claimed back through expenses paid for by cash or card. There was also no VAT being reclaimed through the cash payments.
The company began using Groundscope’s automated booking platform for its chauffeur services and taxis, as well as hiring people-carriers and coaches when necessary. It also employed Groundscope to manage any service issues and customer enquiries.
The platform was first installed in the UK before being rolled out to other markets, starting with the client’s US division. As part of the contract, Groundscope also resolved any customer service problems or invoice queries within each local market.
This move to consolidate ground transport has created cost savings of up to 30 per cent across the client’s markets, thanks to providing better visibility of spending and volume, which has, in turn, helped to drive more discounts from suppliers.
In the UK, the average trip price has fallen by 20 per cent from, £59.99 to £48, which has saved the company around £650,000 per year, based on more than 55,000 annual journeys.
Adoption of the integrated ground transport platform has been increased through a programme of staff training, alongside a multi-faceted in-house communication strategy. This has helped to push up adoption levels to 99.1 per cent for the programme.