With sustained success in the consumer sector, sharing economy companies like Airbnb, Lyft, Curb and Uber, have committed to provide corporate travelers the same level of convenience as standard hotel and transportation suppliers, at a reduced cost. In July 2014, Airbnb for Business was launched, offering 500,000 listings (of 800,000) that it considers appropriate for corporate travelers. That same year, Uber announced a customized service for corporate travelers.
As the sharing economy continues to gain momentum in the corporate sector, it has forced businesses to consider the following, to determine how the sharing economy fits into their corporate travel program:
- The sharing economy is here to stay.
According to Journalist’s Resource: “Social media and mobile technology have enabled the latest expansion of the sharing economy and turned it into a big business: Airbnb allows individuals to share their homes, while Lyft and Uber transform private cars into common resources. All these are for-profit services, but they take only a fraction of the fees levied, passing the rest on to the owners: In 2013 it was estimated that revenues passing through the sharing economy into people’s wallets exceeded $3.5 billion, up 25% from the previous year. Airbnb has exceeded 10 million guest stays since its launch and now has more than half a million properties listed. Meanwhile Uber has said that it is doubling its revenue every six months.”
- Corporate travelers want, and in some cases, demand it.
According to the Society for Human Resource Management, when IBM forbade travelers from using Uber during corporate travel, an employee-driven petition (which went viral within 24 hours) forced them to reverse their decision. It is ultimately an organization’s decision on whether or not to integrate the sharing economy into its travel program. Yet, it is imperative that the impact on employees, as well as retention of control around the use, interpretation of value, safety and human resources be addressed in the travel policy.
- The Federal government is moving in that direction.
According to The Hill, on September 26, 2016, The House of Representatives unanimously passed legislation that would require the General Services Administration (GSA) to issue regulations clarifying that federal workers should be reimbursed for using transportation services like Uber and Lyft – or any similar shared service/technology that emerges in the future when government employees travel on official business. According to Meritalk, The Modernization Government Technology Act (MGT Actfuture of IT modernization funding in the Federal government.”
The MGT Act must still pass the Senate and be signed by the president to become law, but the government is certainly heading in the direction of permitting travelers to use the sharing economy.
- Update your travel policy to incorporate the sharing economy.
Many companies haven’t addressed the sharing economy and their travel program, but every company should have a travel policy that outlines their position on it. The travel policy should clearly present the company’s specific requirements, traveler types and legal tolerance. Most importantly, companies must keep up the pace by updating their travel policies accordingly. Keep in mind that even if your stance is that you have not thoroughly evaluated these emerging tools and the travelers who use them, your travel policy can simply state that employees engaging in the sharing economy do so at their own risk.
Sharing Economy Challenges
Before you authorize your travelers to use sharing economy services, consider these issues:
- Costs: What are the true costs of the sharing economy? On the surface, these services may appear less expensive than standard hotels and cabs. However, when you compare apples to apples, that line of reasoning may not hold true. In order to get the complete picture, you need to address questions including: Does the hotel offer amenities – like free breakfast, wireless connection, room service, a business center or a gym – that are not offered in a sharing economy booking? Are there hidden costs? Have all negotiated hotel rates been considered before booking a sharing economy property?
- Revisit Supplier Relations: In cities with a high frequency of Airbnb bookings, you might want to explore the reasons why your travelers are gravitating towards this service. Is your corporate rate too high? Can travelers get more for seemingly lower rates with the sharing economy? Is booking for the sharing economy easier and more convenient than traditional booking? If travelers prefer the sharing economy route, find out which new offerings they are using and why. Communicate this new information with your preferred suppliers. Ask preferred suppliers for better service with new products and enhanced amenities like free casual meeting spaces, healthier food choices, lower room service charges, etc.
- Loss of Hotel Points: Corporate favorites like The Marriott offer numerous incentives for frequent travelers that can translate into free rooms and other bonuses. If travelers go elsewhere, these points may be lost or go unused. How will you address this in your travel policy?
- Company Culture: For travelers looking for something more informal than a hotel, such as staying with a family for local authenticity, or going outside city centers, the shared economy can offer a worthwhile solution. For employers, more flexible and personalized travel programs result in happier employees and can improve company culture. What is your company culture? Millennials are the largest generation in U.S. history, making up 1 million of the nation’s population, according to the U.S. Census Bureau. Does your company culture appeal to their needs and preferences?
- Sharing Economy Travel Data is Now More Accessible: In 2014, Uber signed a deal with Concur, which allows travelers to bill their trip expenses directly to their Concur account.
- HR and Duty of Care Issues: The Society for Human Resource Management (SHRM) recommends a clearly outlined travel policy that includes procedures and backup plans regarding the sharing economy. Reports of disappearing Uber drivers, lost reservations and Airbnb stays in unsafe areas makes safety a concern. What duty of care and traveler safety measures have you put in place for the sharing economy?
It is clear that the sharing economy is not going away and cannot be ignored. As new mobile apps and technologies continue to improve, offering convenience along with traceable savings through on-demand reports for travel managers, travelers will apply pressure to businesses to incorporate the sharing economy into their travel policy. This is especially true for Millennials, who want travel information at their fingertips with services like Airbnb, Lyft, Curb and Uber.
Sharing economy suppliers are working toward travel and expense system integration, but there’s still a long way to go. For corporate clients who rely on their TMCs to oversee and analyze their travel programs, the sharing economy suppliers need to improve this capability. As of yet, they have not fully addressed integration into travel and expense technology platforms.
Given how quickly technology can impact travel, each business must define general principles that guide its decision-making, while also allowing for timely responses to an ever-changing world. How do your travel policies reflect the shifting demands of travelers? How do you balance the needs of travelers with the corporate mandate to control costs, keep employees safe and promote a positive corporate culture?
To learn how to create an effective travel policy, Download our free workbook: How to Create an Effective Travel Management Policy today.