For a corporate travel program to make the move to a peer-to-peer sourcing model, some serious issues need to be considered.
By Travel Buyers Think Tank
Rosemary E. Maloney, Senior Manager, Global Travel at Coach and Kevin McDonald Senior Director for Strategic Procurement at PPD offer two different viewpoints on the problems and promise of the Sharing Economy.
Point Rosemary: When it comes to deciding about the sharing economy, I find it difficult to be completely one way or the other – either totally pro the peer-to-peer business model or totally against utilizing sharing economy companies within a travel program. These companies definitely help drive costs down and add to traveler satisfaction, but there are reasonable concerns surrounding Duty of Care and company liability.
It all comes down to the culture of your company. As we all know, ride sourcing apps like Uber and Lyft have disrupted the entire car service industry. The ease of booking and availability of vehicles provided a seamless way to get a car and go, meaning employees were using it for personal travel and wanted the same experience when they traveled for business. The added bonus to the travel manager was decreased spend in the ground travel budget category.
In a past policy, I treated ride sourcing apps as taxis, rather than separating them out. But now I’m working on separating out ride sourcing and creating specific policy around it.
I struggled more with accepting use of Airbnb in the program. My trouble approving room stays for employees traveling alone on business are centered on concerns over how many people have keys to the short term rental and a general misgivings over the well being of my employees.
At a previous company, we found significant savings and employee satisfaction when I would allow teams to use full houses when traveling for major festivals like South by Southwest and Sundance. The business unit had a culture of sharing and even did an annual camping trip together – it worked in their culture. Even though we kept it out of our policy, we found this to work well for us for this specific need.
Counterpoint Kevin: To put my thoughts in context, here’s my definition of the “Sharing Economy:” The Sharing Economy is alternatives to both local transportation and housing in a business travel context. Companies such as Uber, Airbnb and the like exploit a market need by using technology to personalize the customer experience. Using apps, they have put control in the hands of the end user.
What that means from a corporate travel perspective is that the travel office loses control of the booking, and by extension, the traveler’s location. This falls under the heading of Duty of Care, whereby a company can find where their employees are, so they can be notified or extracted in case of emergency.
While Duty of Care is not a legal obligation in the US, most companies take it very seriously and insist upon it (and in some countries outside the US, it is mandated by law).
The Sharing Economy and Duty of Care, based upon today’s technology, are fundamentally at odds. Which means the corporate travel office is put in the middle, between ensuring traveler safety and traveler empowerment.
What we have done is take the middle ground. While we are not officially supportive of sharing economy providers, we are not refusing to reimburse travel made through them either – at this point.
However, unless this technological gap is bridged in the near future, we will probably specifically come out against providers such as Uber and Airbnb not only due to duty of care concerns, but regulatory/safety concerns as well.
As with many new, technology-driven, entries to a marketplace, the companies that make up the Sharing Economy have created products that existing regulations were not designed to accommodate. Things such as adequate/primary insurance, zoning issues, background checks, and nuisance laws are all being re-evaluated in light of these new offerings. In some places Uber and Airbnb are being blocked from doing business, or have to dramatically modify their business model to compete with more established companies, thereby limiting some of the potential benefits of the Sharing Economy.
I like the promise of the Sharing Economy. I like the idea of empowering travelers to take some of the burden off the corporate travel office. However, until technology and regulations can evolve to help bridge the information/safety gap between traveler empowerment and corporate obligations, the companies making up the Sharing Economy will have difficulty being fully embraced by corporate travel departments.