For travel programs the challenge of the collaborative economy isn’t whether, but how to harness its power
It’s hard to escape the sharing economy these days. What started out as a simple but innovative business model – using a smart phone app to hook up with an empty ride or an extra bedroom in a strange city – has turned into a worldwide phenomenon. In travel as with so many other areas, the concept behind peer-to-peer access is changing the way things work, and business travel is not immune.
While it’s anybody’s guess where this movement will eventually lead, significant growth seems certain. PricewaterhouseCoopers has estimated that by 2025, the five main sectors of the streaming economy (peer-to-peer finance, online staffing, peer-to-peer accommodation, car sharing and music and video streaming) could generate global revenues of $335 billion. Obviously the emerging trends in car sharing and accommodations are of primary interest for travel managers, but changes in areas such as private aviation may not be far behind.
Even the terminology continues to evolve. The sharing economy has also been called the on-demand economy, the collaborative economy and the gig economy, among other terms, and different descriptions of its sectors have also emerged. In June the US Department of Commerce issued a report on what it has labeled “digital matching firms.” The government has proposed that this definition be used for companies that use IT systems to facilitate peer-to-peer transactions, rely on user-based rating systems for quality control, offer workers flexibility in deciding their typical working hours, and rely on the workers using their own tools and assets in providing service.
Whatever this new economic elephant in the room is called, such options are bringing increasing interest from business travelers. “More and more corporate travel programs are seeing travelers utilize these services,” says Miriam Moscovici, director of emerging technologies at BCD Travel. “They’re seeing these expenses come through their T&E systems, with the amount of spend increasing.”
At the same time, providers such as Uber, Lyft and Airbnb are taking steps to make their services attractive to managed travel programs. “They are tailoring their products to meet business needs,” she says. “All have launched new programs in recognition of what managed travel programs want.”
Typical are the recent measures taken by headliner Uber, which operates in more than 400 cities and 70 countries. To appeal to the corporate sector, Uber has fielded features that handle everything from controlling employee access to creating custom policies. Managers can upload teams or departments in a single batch, as well as add or remove individual riders from the company’s account.
Guidelines on when and where employees may travel can be pre-established so that only trips within guidelines can be charged to the company account. For those within policy, trips are automatically billed to the company along with details such as cost, expense code, vehicle type and route.
Other helpful features include monthly billing and the option to purchase rides for guests to corporate events. Guest passes can be customized with date, time, and a promo code.
Another pioneer in ground transportation, Lyft, reports that it has been securing partnerships with leaders in their spaces such as Airbnb, CareMore, Intuit and Hewlett Packard Enterprise. According to Certify, the use of Lyft in the corporate travel space has increased substantially, growing by 44 percent from the last quarter of 2015 to Q1 of this year.
All told, ridesharing now accounts for nearly half (46 percent) of the total ground transportation category, and Lyft is viewing enterprise as a significant growth channel. Company data reveal that 70 percent of its enterprise passengers are first time riders, and that in many cases business travelers then go on to employ the service for personal rides.
Recent measures include the introduction of Lyft’s “business profiles,” where travelers are given a separate profile so they can receive ride receipts in their work inbox and switch payment methods. Designed to eliminate problems in expensing rides, the option allows users to switch between personal and business mode depending on the situation. Users receive business ride receipts via their corporate e-mail account, choose a preferred credit card and add notes for expense records.
The company’s mobility solutions include the option to schedule a ride up to 24 hours in advance as well as automatic expensing through integration with expense management systems. In addition, a dashboard dubbed Concierge allows travel organizers to request rides on behalf of passengers.
Increasing FluidityOf course ground transportation is only part of the new scene, with increasing numbers of business travelers checking out alternatives to traditional hotel stays.
Jean Noel Lau Keng Lun, senior director global product marketing for Egencia, says that the use of alternative lodging has become a fact of life for business as well as personal travel. “People have come to like and use it for their personal life,” he says. “When it’s convenient for them in the corporate space, they will use it for business travel.” He maintains the only alternative for travel managers is to adjust to a changing scene. “The real question is how travel managers can leverage these kinds of things to fit in the culture of a company.”
The entire travel sector is an increasingly fluid one, notes Lau Keng Lun. New providers are emerging while at the same time, more established players are strengthening their positions through partnerships and acquisitions. For example Egencia has added Uber and Citymapper to its Tripnavigator app to simplify the process of arranging ground transportation. That move followed the late 2015 acquisition of HomeAway by Egencia’s parent company, Expedia, greatly increasing its number of lodging properties.At Airbnb, special focus is being placed on business travelers as more companies are incorporating alternative lodging into their corporate travel programs. At least part of the impetus seems to be positive experiences in leisure travel that are leading business travelers to explore new options. The blending of personal and professional interests is another factor.
“People are combining business trips with weekend stays and extending trips to experience a destination like a local,” says Lex Bayer, Airbnb’s head of global payments and business development. Company studies show that the average stay on Airbnb for Business is more than one full business week (nearly 6 business days) which often includes at least one weekend day.
Last November, the company introduced Business Travel Ready listings to meet the specific needs of road warriors. These listings feature laptop workspaces and guaranteed 24-hour check-in. They also offer business-friendly amenities such as hangers, irons and hair dryers. Thus far companies from 35 countries have signed up, Bayer reports.
Airbnb has also worked with major companies including Google, Salesforce and Morgan Stanley to develop new corporate travel programs. In promoting its offerings, Airbnb touts potential cost savings, enhanced social interaction, larger accommodations for teams and comfortable stays for long term stays.
Same Game, Different RulesThroughout the sharing economy, horizons continue to shift. Lyft is expanding into transportation experiences for recruiting teams, event managers, hospitality services and healthcare companies.
Other companies of various sizes are offering services that may attract business travelers as well as vacationers. With Getaround, car owners in five western and mid-western cities rent out their vehicles as an alternative to the usual car rental or other ground transportation. Miami’s miRide, launched in 2015, promotes itself as affordable alternative to traditional black car options. Business clients can take advantage of fixed-price rides that can be obtained promptly or scheduled for later pick-up. And for those interested in checking out electric cars, the Blue Indy car-share service in Indianapolis offers yet another option.
Lodging alternatives such as Couchsurfing also play major roles under the sharing economy model. Beyond travel, a widening array of services are launching from lending to talent sharing.
As companies to continue to enhance their T&E solutions, the need to include options based on the sharing economy is bringing advantages both to travelers and travel managers. That’s the case with Egencia, which has consolidated options that allow travelers to use their mobile devices to choose between say, public transport at an airport or Uber.
“You have all these options in one space,” Lau Keng Lun says. “A traveler can see how much each will cost and how long it will take, and decide what matters most at the time. It’s making life easier in managed corporate travel.”
He adds that both travelers and travel managers may need to adjust to seemingly minor differences that still merit consideration. For example, a traveler can check in at a hotel at virtually any time. But when renting a house or an apartment, it may be necessary to meet someone at a pre-arranged time to pick up a key.
Similarly, some costs may not fit within traditional travel guidelines. “How do you expense a cleaning charge?” Lau Keng Lun asks. “Maybe the traveler will disguise it as a lunch, or maybe just swallow it.”
Duty of care brings other considerations, he adds. With traditional hotel stays, it may be easier to reach travelers in the event the unexpected happens, or at least determine the circumstances at hand. But this can’t be assumed with non-traditional accommodations. “You can always reach the hotel lobby to find out what’s happening in that area,” Lau Keng Lun says. “But when something like Brussels, Paris or Orlando happens, these kinds of things can matter.”
He notes that despite such challenges, at least some elements of the sharing economy will be embraced by travelers, and travel managers will need to respond appropriately. “It all boils down to thinking of it in the larger context of company culture,” he says. “How can it be useful?”
Ideally this will include adapting to changes in employee expectations. “Your teams are rapidly changing,” notes one Lyft spokesperson. “Millennials will make up half the workforce in five years, car ownership is dropping and the organizations are as diverse, global and connected as they’ve ever been.”
Moscovici says that as new companies emerge into the marketplace or existing ones improve their services, appeal to business travelers may be inevitable. “When a player comes into this arena, travelers will vote with their feet,” she says. “Look for ways to support them.”
Among other strategies, this means finding ways to accommodate what might have been problematic in the past. “The old approach of reserving six hotel rooms and a cocktail room might change to renting a Georgian mansion,” she says. “And these kinds of instances are going to continue to expand.”
Such changes can make sense for more than just social reasons, she adds. “There may be cases where an Airbnb apartment is appropriate for an executive who needs to have sensitive meetings,” she says. “Or such a rental might be more effective in an inventory-poor city, where it would otherwise be too expensive for a team of workers to attend.”
Whether with lodging, transportation or other aspects of business travel, the changing scene is sure to bring both challenges and opportunities for travel managers. Although the future remains uncertain, at least some of the approaches offered through the sharing economy would seem to be a sure bet for any travel program.