While corporate travel buyers are generally satisfied with their chauffeured car suppliers, they hunger for technological innovation within the industry, particularly as it faces growing competition from ridesharing services, according to BTN’s 2015 Ground Transportation
Survey. Of the 158 corporate travel buyers who responded, nearly 80 percent said chauffeured transportation supplier service had improved or held steady compared with last year. Only about 20 percent said service quality had declined. For more travel buyer feedback, click
here.
Buyers gave the highest marks to their preferred chauffeured suppliers for licensing of drivers and for insurance, two duty-of-care aspects that suppliers frequently highlight as they compete with ridesharing services like Uber. Those emergent companies have touted their own precautionary
measures like background checks, but traditional ground transportation companies have said corporate travel still requires the rigorous testing, such as defensive training and random drug tests, that traditional companies provide.
“Your chance of dying in an accident on the business trip are much higher on the ground piece than the air by a huge multiple,” Dav El and BostonCoach CEO Scott Solombrino said. “People should pay attention and care about who’s driving their people around and what kind of compliance they
have to keep.”
Even so, ridesharing companies continue to make gains among corporate business. Uber reported this month that its Uber for Business platform, which does not offer specialized corporate pricing but does let buyers centrally manage payment and put in policy controls, signed up more than
50,000 companies in its first year. A handful of survey respondents wrote that they discourage ridesharing, and others say their travelers can use it, whether that’s communicated tacitly or expressly in policy.
Some buyers indicated that ridesharing and chauffeured services are separate issues, as ridesharing has taken taxi share while execs continue to use chauffeured services. Uber reported that 70 percent of Uber for Business-booked rides went to UberX, the least expensive of its services.
Other respondents, however, said ridesharing and chauffeured services are blending. One buyer said few travelers use UberX and Lyft, and rather most use black car ride-sharing options “to get the same type of licensed service that we have always used.”
Another buyer said: “Our chauffeured car bookings are down, but so are our livery service costs. If Uber and Lyft can continue to demonstrate concern over corporate traveler safety and act to improve safety, we will continue to use their services. It positively impacts my bottom line
but not at the peril of my travelers.”
Buyers gave a high score to their chauffeured suppliers for ease of booking, but the suppliers nonetheless are taking on ridesharing companies in that area. Carey International, for example, has launched websites and mobile applications that let travelers control their trips and communicate
with the parties involved more directly.
Suppliers also are bringing in on-demand models. Deem and the National Limousine Organization are developing a mobile app that helps travelers make advance reservations with chauffeured transportation suppliers and hail chauffeured cars in real time.
Buyers indicated those are the right approaches. One cited easier online-booking access as the primary area in which the buyer’s primary supplier needed the most improvement. Another implored the primary supplier to implement on-demand service, as “they are losing their drivers to those
services, anyway.”
Solombrino, who also is interested in on-demand, said it’s become a necessary step.
“You see a very intense battle with the on-demand side of the business, and we have to shift with it,” Solombrino said. “We can’t keep doing the same thing over and over again and complain about what they’re not doing. They built the better mousetrap, and we admit that.”
In BTN’s survey of travel buyers, chauffeured suppliers scored worst in pricing, in which it’s hard to compete against ridesharing suppliers’ low overhead. That model, however, could be in jeopardy now that a judge expanded a lawsuit against Uber into a class action this
month. The case calls into question ridesharing companies’ ability to categorize drivers as contractors instead of employees.
Solombrino said his industry’s argument always has been that ridesharing companies should operate under the same regulations as taxi and chauffeured companies. “Either deregulate all of us or regulate them, but they should not be exempt.”
This report originally appeared in the Sept. 14, 2015,
edition of Business Travel News.