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Uber for Business: Promise or Threat?

How catching a ride from a guy in his Honda Accord could change the shape of business travel.

August 5, 2014

SHARING TOOLS        | Print Subscribe

Uber launched a business travel initiative at the Global Business Travel Association (GBTA) convention last week. Room 410 of the Los Angeles Convention Center was packed, but not necessarily to hear the press announcement.

The chauffeured transportation companies in the audience had a thing or two to say to Uber, the on-demand black car and peer-to-peer ridesharing service that’s been eating into the taxi and limo business along with other transportation network companies (TNCs), such as Lyft and Sidecar. Yes, that Uber, the company that was recently valued at $17 billion.

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The crowd was not intent on hearing how Uber for Business will facilitate a new method of business travel. They wanted to know about driver qualifications, insurance regulations and a wrongful death lawsuit. For Uber, they hailed a ride to the lion’s den.

Uber representatives said they wouldn’t take questions, but would be available to talk individually after the presentation. The crowd wasn’t having it, and forced them to sit and listen to the group. Uber reps answered what was appropriate and provided “no comment” for the rest.

Can you say disruptive business model? Uber’s warp-drive growth — from zero to 162 cities and 42 countries in about four years — is staggering. This pace of this growth inevitably brings out the daggers, as Uber sidesteps entrenched regulation and bureaucracy that traditional transportation companies have been managing for decades.

“All it takes is one federal judge to say that they’re employees and not independent contractors,” said Scott Solombrino later at a sit down during the GBTA convention. Solombrino is CEO and president of Dav El and Boston Coach, owners of the largest chauffeured transportation fleet in the world. Nonetheless, “Uber has changed the paradigm of how people view transportation,” he admitted.

Solombrino is starting a similar “on-demand” service, though instead of using independent contractors his drivers will be employees of existing transportation companies and vetted by traditional means. The service is testing now; he anticipates going live in October. “Uber built a better mousetrap, but we’ll do it even better,” he said.

Walking around the GBTA’s show floor made it clear that the technology used by Uber, its competitors and Solombrino is also driving a broader trend toward the real-time visibility and “consumerization” of business travel in all of its forms.

This technology is pushing notifications to your smartphone on the amenities included in your negotiated travel rates. It’s establishing and refining your preferences — and knowing where you are — through your credit card swipes. It’s automatically categorizing your expenses at the point of transaction. It’s about rating everything and getting rated yourself. Welcome to the age of transparency.

After the convention, I went to a reception at an off-site hotel and found myself amid a group of travel managers. I asked for their stance on this sharing economy when it comes to business travel (which now includes lodging through Airbnb and office rental through PeerSpace).

They agreed that there are a myriad of insurance and regulatory issues to be sorted out, and corporate policies are being drawn up to govern usage. Nonetheless, travel managers, including Eric Bailey of Microsoft, said that Microsoft employees had been using Uber and Lyft for business well before the day’s announcement.

Indeed, the daily barrage of lawsuits, protests, city council hearings and opinion papers continues. But if Uber, Lyft and the like somehow fail to survive, there will be multiple companies — such as Solombrino’s — that will get it right. The model, in its purest form, is that powerful.

At the end of the night, I wasn’t in the mood to hoof it back to the convention center parking, so I summoned Uber. The app said the driver would be at the hotel in seven minutes; it was closer to four. I rushed outside, not wanting to create a delay for the driver that might damage my passenger rating.

My driver, Jorge, was friendly and driving a very clean late-model Honda Accord. The experience was seamless; the trip was quick and cheap. Enough said.  

Comments

  1. 1. Niall Johnson [ August 26, 2014 @ 12:44PM ]

    Something that is brought to mind in this article that a business must always be prepared to adapt or die. Uber found a niche in the market that was otherwise unexploited, and good for them! While the concerns raised by others in terms of regualation and insurance are indeed valid, my first question would be security. How are Uber drivers vetted etc., how Uber deals with a stolen vehicle, and what safeguards are in place in case of a date breach?

    Having said all that, another article by Mr. Brown made reference to a lamentation of larger companies absorbing smaller ones to the point of threatening entrepeneurship. Here we see a wonderful example of entrepeneurs adapting and growing. Kudos!

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Author Bio

Chris Brown

Executive Editor

Chris Brown is the executive editor of Business Fleet Magazine and Auto Rental News. Through these publications, online newsletters, trade events and associations, Chris covers all aspects of the fleet world, including fleet management, manufacturer fleet activities, the fleet leasing industry, vehicle remarketing, rental industry news, car rental taxation and legislation.

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