“BOY, if you’re a taxi owner, you’d better think about a new model.” After studying his company’s latest report on business-travel spending, Bob Neveu is pretty clear about the way the world is heading.
Certify, an expense-management software company, released its quarterly report of spending trends on on July 27th, and the numbers are stark. Traditional taxis now account for just 8% of ground transportation transactions among American business travellers—the first time that figure has been in single digits. In contrast, the rise of Uber and Lyft seems unstoppable.
It has been a rough year for Uber in a lot of ways. There have been allegations of sexual harassment and a hostile workplace culture, as well as a lawsuit from Waymo, a Google affiliate that alleges it stole self-driving car technology. Last month, Uber’s besieged boss, Travis Kalanick, resigned. But its appeal among people travelling for work does not seem to be diminishing. Uber was responsible for 55% of ground transportation transactions tracked by Certify in the second quarter of this year, compared with 29% for rental cars and 8% each for taxis and Lyft. Excluding rental cars, Uber accounted for more than three-quarters of trips on the road. In some cities, that figure was even higher. In the tech-hub of San Francisco, for example, 85% of non-rental-car rides go to Uber, with Lyft getting 12% and taxis just 3%.
Taxis’ decline has been precipitous. A year ago, Certify’s survey found that taxi usage had already declined by 51% over the past two years. But they still represented 22% of ground transportation trips, excluding rental cars. A year later, that figure has halved. Lyft has been a big winner in recent years, growing from 0.34% of the non-rental-car market in 2014 to 5.2% last year and 11% now.
Business travellers look for three things in ground transportation, Mr Neveu says: convenience, quality and cost. Hailing (or pre-ordering) an Uber or Lyft on a smartphone has become more convenient than catching a cab on the street. Quality is also often more reliable, Mr Neveu says, with many Ubers and Lyfts offering bottled water and phone chargers. And while business travellers do not usually foot the bill for their rides, the cost is lower than taxis, too. According to the report, the average Uber ride last quarter was $24.49 and the typical Lyft cost $21.28, versus $31.06 for taxis. Travellers gave Uber the highest satisfaction rating, 4.46 out of 5; taxis got the lowest rating, 3.83.
Uber’s bad PR this year might give some business travellers pause, but Mr Neveu says there is a much bigger factor counteracting that. Many companies, particularly large ones, have been slow to allow employees to use and expense ride-hailing services while travelling. A survey earlier this year by the Global Business Travel Association found that half of corporate travel policies, across eight countries including America, still do not explicitly allow workers to use ride-hailing services. But that figure was already declining quickly, and the trend is probably accelerating now. More companies, Mr Neveu says, are putting Uber and Lyft onto their lists of preferred or allowable vendors. Companies are also allowing employees to book Uber and Lyft using company credit cards that are pre-loaded into their apps, saving them the trouble of getting reimbursed for cabs and giving them an incentive to book with these services.
The next big shift over the coming year will probably be in lodging. The Global Business Travel Association survey found that 70% of corporate travel policies do not include home-rental services like Airbnb. But that is changing. Business travellers’ use of Airbnb increased by 31% in the second quarter alone, according to Certify, but it still represents a measly 0.42% of lodging bookings—less than one-twentieth of Hampton Inn, the most expensed hotel chain. That is sure to change.
One thing that does seem constant, though, is the dominance of fast food. McDonald’s remains the popular restaurant for lunch and dinner, with Starbucks leading the way for breakfast. And there is one company that has not budged from the top of the list of the most beloved restaurants. Chick-Fil-A has posted the top restaurant satisfaction rating since Certify issued its first report in 2013.
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