Ride-hailing services continue to grow among business travelers

Scant 14 percent of business travelers using traditional taxis

For the first time, ride-hailing services including Uber, Lyft and others have surpassed both taxis and rental cars as a percentage of total ground transportation transactions among business travelers.

Expense management provide Certify, which first identified the emerging trend in its SpendSmart™ Report for the first quarter of 2015 (1Q15), says that now – one year later – the use of ride-hailing services among business travelers is at an all-time high and shows no signs of slowing.

While Uber continues to dominate the ride-hailing universe and is capitalizing on programs lie Uber for Business, the Certify SpendSmart™ Report for 1Q16 shows that competitor Lyft also made inroads into the corporate market starting late 2015.

In a special supplement to its 1Q16 report, Certify provided a detailed analysis of the ground transportation trends and purchasing behaviors of business travelers across the country.

“Looking back over the past nine quarters, taxi’s decline and Uber’s subsequent rise in the ground transportation category began as a slow drip that quickly flooded the business travel market in 2015,” the company said in its supplemental report.

The Certify SpendSmart report for 1Q16 showed that ride-hailing services surpassed rental cars and eclipsed taxis as a percentage of total rides nationally. The increase continued the trend of the prior seven quarters and, in 1Q16, ride-hailing services accounted for 46 percent of all paid rides. The taxicab category, which includes traditional taxicabs, limousines and shuttles, accounted for only 14 percent, a significant drop from 20 percent in 4Q15 and 22 percent in 3Q15.

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.

While the company says ride-hailing pioneer Uber is quickly becoming the preferred choice for ground transportation by business travelers, it also anticipated that Lyft will become a bigger player in the business travel market in 2016. It says a $1bn round of investment at the end of 2015 – including $500m from General Motors – will no doubt prepare the company for tougher competition in the year ahead.

Part of the appeal of ride-hailing services are their price. According to Certify data, the average taxi fare can cost as much as 55 percent more than the average Lyft ride. Expense reports submitted through its expense management system shows that the average Lyft ride cost $23.53 and the average Uber ride cost $26.41, while the average taxi ride cost $39.68.

Increasingly, businesses are allowing their traveling employees to expense rides on services like Lyft and Uber. Certify officials see that trend continuing throughout 2016.

“It’s the consumerization of the enterprise,” Robert Neveu, Certify’s president, said in the report. “[C]ompanies that might have once banned the use of ride-hailing will ultimately have to reconcile T&E policy with the will of the employee.”

Ride-hailing services are proving popular with business travelers for more reasons that a smaller line item on their expense reports. Users rate their satisfaction with ride-hailing services substantially higher than both taxi and car rental. Uber riders gave the company 4.7 points out of a possible 5 while Lyft customers ranked that service only slightly lower, at 4.5. Car rentals earned 4.1 point, while taxis trailed the pack at 3.8.

Ride-hailing is by no means the only service offered through the so-called “sharing economy” that has been successful with business travelers. Lodging service Airbnb has begun to appear in Certify SpendSmart transaction data for several quarters, although on a much smaller scale than Uber and Lyft in the ground transportation category.

Elsewhere in the sharing economy companies like shared office provider WeWork, meal delivery facilitators GrubHub and DoorDash, custom packer and shipper Shyp and others are lining up to attend to the needs of the lucrative corporate travel market.

“Anything that saves time and money while providing real value is going to be a hit with business travelers,” Neveu said.

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