Why travel managers need not be afraid of the rise of Uber

Posted: 01 June 2016
Topics: Blogi
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Anyone got an Uber code? In the last couple of years, this has been a common shout-out on social media as the fast-growing ground transportation company expanded its footprint into Europe. That phrase is actually a manifestation of a phenomenon known as growth hacker marketing, one which has been used successfully by internet companies such as Groupon and Twitter to grow hyperfast while spending little or nothing on advertising to new users. Groupon used a number of hacks, including making deals limited in time and only available if a minimum number of people bought them, encouraging you to share details of the deal (and Groupon). Twitter was suggesting a list of people you should follow when you first sign up; the microblogging network’s founders’ research had shown that people were more likely to use it if they began to follow people on their first day. With Uber, it is the free rides and discount codes which are showered on potential users, particularly attendees at conferences, that have helped it grow. And oh, hasn’t it grown?
 Leaked financial documents seen by The Information’s Amir Efrati show that the company generated revenues of US$2.1 billion in the second quarter of 2015, compared with US$2.9 billion for the whole of 2014. Admittedly, the documents showed it was also haemorrhaging money, racking up losses of US$1 billion in the first half of 2015, compared with $671.4 million the year before.
Supporters of the company say such losses are all part of the company’s grand plan. It is not just in the leisure arena that Uber is seeing growth. The uptake of Uber by business travellers was highlighted in April when travel and expense management services provider Certify revealed that the number of expense transactions relating to Uber and Lyft, another transportation network company, now accounted for 46% of the total ground transportation category, meaning that they had overtaken car rental. Transactions on Uber account for 43% of the total category. Asked to comment on the figures, Max Crowley, Lead of Uber for Business said, "Business travellers rely heavily on their smartphones and gravitate towards companies and apps that remove friction from their daily lives.” Uber’s intentions in the business travel market were underlined in November 2015, when it launched business profiles. These allow users to keep their business and personal trips separate. In March this year, the company started working with a number of expense management providers to file expense reports made using business profiles automatically. Uber says that more than a million people are now using business profiles. All of this shows that no matter how many people rue the lack of control and visibility when travellers choose Uber that business travellers are embracing the service. Travel buyers ignore this trend at their peril as travellers who want to use some slick new service, whether Uber or something else, will always find some loophole to access it. Recognising this fragmentation of content and how to manage that will be one of the key challenges for travel managers in the next few years and it is something that Egencia has recognised and has addressed. Egencia has now integrated Uber fully into its app which is available for Android, iPhone and iPad. Say you have booked a flight from London to New York along with a hotel at your destination. If you are browsing your actionable itinerary within the app, you will see three ways of getting from the airport to the hotel – via public transport, car and by Uber - and how long each is expected to take. Prashanti Tata, Egencia’s Senior Product Manager, Mobile Product, says, “Many travel managers say they have no visibility of how Uber is being used by their employees. This integration should give them more consistency and details about their travellers’ journeys. Travel managers can’t ignore the business traveller’s desire to use on-demand transport options, but should embrace their use to benefit their travel policy. Integrating it with their Travel Management Company will give them more control over ground transport costs while giving the traveller what they are used to from their private travels.” Ground transportation at the destination is a constant challenge for business travellers. The second annual Egencia Business and Travel Technology Study found that 45 per cent of business travellers around the globe found arranging ground transportation to be the most frustrating part of booking their own travel. The slick integration of ground transportation options, including Uber, into the Egencia app should help ease that pain. It will also help travel managers. Prashanti Tata says, “One of the things we can offer them is showing when employees from a company are clicking on Uber links. This gives a visibility into what was previously a black box.”
Can you speak Uber? Uber’s service options can seem confusing – and no wonder. For example, as some countries and cities ban certain types of service, not every option is offered in every market. Every market also has differing requirements on the qualifications of drivers and their cars. In the UK, for instance, private hire vehicle drivers are all licensed by their local authority and have undergone an enhanced CRB check - the same as carers, teachers and black cab drivers- although the topographical skills assessment they take, which checks their understanding of London’s locations and streets is less stringent than the famous ‘Knowledge’ exam that London's black cab drivers must pass. Here’s our handy guide to the terminology. Note that base fares, time and mileage charges for these services increase as you go down this list.
  • UberPOOL – Car sharing for people heading in the same direction
  • UberX – Uber’s ‘low-cost’ option where drivers use their own cars (which must have four doors, be able to seat four passengers, be ten years old or less and be in excellent condition)
  • UberSELECT – Similar to uberX but with more luxurious vehicles, typically with leather interiors
  • UberEXEC – A professional driver with a private-hire licence and commercial insurance driving an executive-level, new shape E-class or equivalent vehicle that comfortably seats four passengers
  • UberXL – The Uber service for larger vehicles which can take up to six passengers
  • UberSUV – The luxury version of UberXL
  • UberTAXI/UberT – Book a black cab through Uber and pay normal black cab rates
  • UberLUX – Highly experienced chauffeurs who offer the very highest level of service and drive high-end vehicles, typically long wheel base, S-class or equivalent