Business travelers turning to Uber over taxis - report

A report by travel and expense management software provider Certify shows some surprising trends in business spending over the first quarter of 2015.

The Certify SpendSmart report for the first quarter of 2015 uncovered that the ridesharing service Uber is quickly transforming the business transportation market at the expense of traditional taxicabs, limousines and shuttles. In 1Q15, an average 46 percent of all total paid car rides were through Uber, compared with 15 percent during the same period in 2014. Paid rides using vehicles in the taxicab category, which includes limousines and shuttles, dropped from an average of 85 percent in 1Q14 to an average 53 percent of paid car receipts in 1Q15.

While the shift toward ridesharing services is driven by the preferences of individual business travelers, the change should also be welcomed by company bean-counters. According to Certify’s data, using Uber is generally cheaper than other forms of hired transportation. The average ride for 1Q15 was $31.24 on Uber, compared with $35.40 for taxis.

“More companies are choosing Uber for Business every day to offer their employees a safe, affordable and reliable option in over 300 cities globally,” Max Crowley, manager of Uber for Business, said in a statement. “Employees recognize the value of riding with Uber and are saving their companies money in the process.”

The shift to Uber is not consistent; it varies by market, according to Certify.

“Business people in Dallas and San Francisco are now expensing Uber more often than taxis, while taxis still dominate market share in New York,” Robert Neveu, CEO of Certify, said.

The quarterly report also offers an analysis of Uber’s growing market share in several major U.S. urban markets including New York City, Washington D.C., Atlanta, Miami, Chicago, Dallas, San Francisco and Los Angeles. Other ridesharing services, including Lyft, are having a significantly smaller impact than Uber and represent a very small proportion of the total ridesharing market, according to the report.

The report also lists the hotel chains, restaurant chains, car rental companies and airlines that are most frequently expensed, the average amount of those expenses, and the ratings of the service providers.

Overall, JetBlue (NYSE:JBLU) and Alaska Airlines (NYSE:ALK) are the first- and second-highest rated airlines. However, perhaps due to their smaller networks, they are used far less frequently than other, larger carriers. Delta (NYSE:DAL), Southwest (NYSE:LUV), United (NYSE:UAL) and American (NYSE:AAL)/US Airways are the airlines with the most frequent expense submissions.

While reported separately by Certify, the combined shares of American (11.32 percent) and US Airways (8.79 percent) total 20.11 percent of bookings, a close second to Delta, which had 20.67 percent. American and US Airways’ merger was finalized on Dec. 9, 2013, though the two carriers have yet to fully integrate their legacy systems and, at this writing, continue to fly two separate flags.

Hotel chains reflect a similar disconnect. While Westin Hotels are rated the best, with 4.4 of five possible stars, Westin is Number 15 on the list of hotels expensed. Other top-rated hotels include Homewood Suites (4.3), Hilton and Hyatt (4.2 each). While Marriott Hotels (NASDAQ:MAR) top the list of those most frequently expensed, it is followed closely by more budget-oriented chains including Hampton Inn, Courtyard by Marriott, Hilton Garden Inn and Holiday Inn Express.

The report includes an average cost for each expense submission but the amounts for hotels are “[P]er expense and Certify does not share the average nightly rate charges in this report,” a company spokesperson told TheTravelPro. One might be able to infer that hotels designed for longer stays would have a higher per-expense total while stays at higher-priced hotels could be shorter in duration.

Further complicating the hotel figures is the fact that many companies require that travelers on extended trips file expense reports periodically during those trips – often weekly – a practice that would further obfuscate any financial data reported.

When it comes to eating while on the road, Starbucks (NASDAQ:SBUX) is the most frequently expensed, followed by McDonald’s (NYSE:MCD), Panera Bread (NASDAQ:PNRA), Subway and Dunkin’ Donuts (NASDAQ:DNKN). Interestingly, the amount expensed at Starbucks and Dunkin’ Donuts, which both have their greatest appeal at breakfast time, is virtually identical at $12.32 and $12.47 per expense item, respectively.

The restaurants patronized most often do not strictly align with those travelers thought of most highly. Chick-Fil-A was rated 4.4 our of a possible 5 by travelers, followed closely by Chipotle (NYSE:CMG) at 4.3, Starbucks and Panera Bread at 4.2, and Dunkin’ Donuts at 4.1.Chick-Fil-A has 1,900 stores in 42 U.S. states while Starbucks has more than 22,000 stores in 66 countries.

Starbucks is the restaurant most frequently expensed for breakfast and has 13.74 percent of expense entries for the morning meal while Subway is most expensed for lunch at 3.12 percent and McDonald’s for dinner at 1.4 percent. In all, the percentages for the top 15 most frequently visited restaurant is less than 19 percent, possibly indicating that a significant majority of business travelers eat at restaurants that are either stand-alone operations or part of very small or local chains.

When it comes to renting a car, the “most expensed” and “top rated” lists are almost in perfect sync. National Car Rental is the most expensed but travelers’ second favorite; most expensed Enterprise is the top rated company. Hertz (NYSE:HTZ), Avis and Budget are numbers 3, 4 and 5 on both lists, respectively. All of the rental car companies except Hertz are operated by Enterprise Holdings, which is privately held.

The Certify SpendSmart report, which is issued quarterly, tracks spending across major categories such as food, airlines, lodging and car rentals and highlights top vendors for business travelers using data from millions of business expense receipts processed using Certify.

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