The Uber revolution and some excellent new management technology mean businesses can no longer ignore how their travellers book taxis and limos.
Do you control your ground transportation (taxis and chauffeured cars) as carefully as you manage your air and hotel spend? If the answer is no, you are not alone. “Ground transportation is an isolated and forgotten piece of travel,” says Jonathan Willoughby, director of UK and Europe operations for SummitQwest, a consultancy specialising in this sector.
Not addressing ground transportation means businesses are failing to manage an average 5-10 per cent of their travel spend, according to DK Consulting. But now there is an even more compelling reason to tackle this issue once and for all. The rise and rise of Uber has led travellers to take matters into their own hands, choosing a supplier that in many cases their employer would not want them to use. At the very least, companies need to decide whether or not to allow employees to ride in an Uber car.
“Business travellers are using Uber in their personal life and saying it works brilliantly for them, so they want to know why they can’t use it for business,” says Willoughby. “But the key concern for companies is that they are unconvinced Uber meets their duty of care requirements.” However, Willoughby notes that attitudes are changing. “A year ago, no business would have considered Uber, but now I would estimate 25 per cent allow it, while 20-25 per cent have said categorically no and the rest are undecided,” he says.
Another good reason for taking a fresh look at ground transportation is that the same technology which powers Uber is also being used to improve service by more corporate-friendly suppliers. However, while the tools are moving on, attitudes are not always keeping pace. “The opportunities and booking tools for ground transportation have changed over the past two to three years, allowing businesses to manage in a much more efficient way, but adoption has not been as high as it could be,” Willoughby says. “It is still perceived as a fragmented, labour-intensive category, so no one wants to pick it up.”
Part of the problem is that the person in a company responsible for managing the rest of the travel programme often does not look after ground transportation as well. Either no one at all manages the category or it is handled by departments such as facilities or corporate services. Integrating ground transportation with travel would enable the same controls to be introduced as for air, hotel and car hire, and it would also give businesses better visibility of total trip spend.
The cateogry is much better automated than it was a few years ago. Travellers or administrators can book online and now, just like Uber, they can use a mobile to summon taxis or even limos on demand. As with Uber, a taxi app like Hailo shows the traveller the location of the car coming to collect them, and they can pay via their phones and rate their drivers. The difference is corporate clients can be fully satisfied the drivers and vehicles being provided to them are fully insured, indemnified, trained and inspected.
In most cases, the booking technology also produces reporting that allows employers to monitor spend and compliance with policy, and check for over-charging by drivers or inflated expense claims by travellers. These specialised tools are a major step forward for the managed travel market because coverage of ground transportation on general online booking tools or through global distribution systems continues to be poor.
The TravelpoolEurope perspective – A great opportunity
Like rail a few years ago, technology has evolved to the stage where ground transportation is ready to be managed closely. What is more, the Uber phenomenon means this category has moved into your “Urgent” in-tray whether you like it or not. Ground transportation needs to be addressed for risk management reasons as well as the opportunity to make savings, not just in major markets like London and New York but now in many other cities as well.
How to get your ground transportation programme up and running
Step 1 – Understand what you are doing today
How much do you spend, and where? Who are your suppliers? You will have to dig deep to find data (for example by looking at expense reports and card reporting) because spend is usually severely fragmented among different departments and vendors.
Step 2 – Who manages the spend?
The answer may be “no one”, or many different people. Either way, you will have to make a business case (on the grounds of risk management as well as cost control) for moving ground transportation inside the travel programme.
Step 3 – Introduce a booking platform
Look for technology that allows you to book at negotiated rates. Different taxi and limo companies and consortia offer their own booking tools, but this creates a problem because it is unusual for just one vendor to cover all of a client’s ground transportation needs. As a result, travellers may have to use two or more tools/apps, and there is also the familiar disadvantage of being tied to a supplier through introducing its booking technology. Willoughby claims his company SummitQwest solves these challenges by offering a unified booking tool which can integrate reservations with numerous ground transportation suppliers.
Step 4 – Negotiate with suppliers
Ground transportation suppliers will give discounts in return for more business. Once you have gathered reliable data, try to negotiate deals in all markets where you have reasonable volume. And remember it’s not a straight choice between taxis or black limos driven by chauffeurs in cap and uniform. Many companies are saving money by booking more regular vehicles like people-carriers.
Step 5 – Adjust policy
In the Uber age, you need to tell travellers very clearly what your ground transportation policy is. Are they allowed to hail taxis on the street? Are they allowed to use Uber? If not, explain why not, and why the suppliers you have signed are excellent alternatives but which also meet your duty of care obligations.