Ground transportation in corporate travel has evolved into a complicated and costly mess. There is some hope that new platforms will solve these issues, but that point isn't coming any time soon.
Much has been made over the last few years of the growth of Uber, Lyft, and other new mobility platforms in corporate travel.
Yet fragmentation in the ground transportation space, along with the power of consumer habits bleeding over into the business travel world, has limited the role of ridesharing and scooters in corporate travel policies.
A die-hard Lyft user, for instance, is unlikely to use Uber just because they are told to. Likewise, someone who is skeptical of tooling around on a scooter isn’t going to start using them just because their company will pay for it.
These issues, and myriad others, have led to intense competition among mobility technology providers around the world. Even giants like Uber can’t penetrate every market, while communication platforms like WeChat are building partnerships and connections to sell rides to users without them using an individual provider’s app.
This is “the World War One trench warfare phase of mobility,” said Mozio founder and CEO David Litwak at The Mobility in Travel Forum Thursday in New York City. “Uber has retreated from Russia, China, Southeast Asia; many of these guys are still trying to figure out how to serve the travel use case… [and for superapps, the question is] how do we get more people using our digital wallet, our credit card, so let’s provide services around it.”
In corporate travel, the variety of options available to travelers has limited the ability of travel managers to be able to direct traffic to certain vendors in exchange for preferred rates. The model that drives air and hotel buying in the sector simply does not work for ground transportation.
“In many places, Uber and Lyft tried corporate negotiate rates but the travel manager wasn’t able to say, ‘you must use Uber or Lyft,'” said Litwak. “You can’t negotiate a deal and say you’re going to direct traffic when you can’t turn it off or on. The trend seems to be to try to figure out the way to control this market, the way you can turn off American Airlines on Concur.”
Scooting Into a Mess
While venture-backed scooter and bike companies have poured billions into expanding across the U.S., many impediments still remain to more widespread adoption.
“The biggest issue we see in micro-mobility is the policy question,” said John McGinty, head of transit partnerships at Uber. “People don’t take these vehicles because they don’t feel safe in them, but for folks who view these alternate mobility modes as reliable, there are policy questions [of whether to support bike lane infrastructure or automobile infrastructure] that will boost the [popularity] of the micro-mobility option.”
In other words: people want to feel safe. At the same time, travel managers need to ensure their travelers are safe. Unfortunately, cities have yet to do enough to ensure the safety of those choosing these alternate transportation methods.
Uber, Lyft, Google Maps, and others are in the midst of connecting their platforms with public transportation systems, as well. Every city, however, has different payment methods and types of transportation, making this process an arduous task. Over time, companies will ease the burden of building technology and payment platforms for cities and be able to capitalize on these partnerships.
The goal is to eventually have every possible ground transportation option available through an app, even public transportation.
“First and foremost, we need to nail aggregating those modes on our platform; once you co-locate those modes and figure out the interoperable payments, there’s a lot of additional physical things and [elements] on the digital apps to give them the piece of mind to use those options,” said McGinty. “To be able to actually nudge people in corporate travel policy, absolutely that is something interesting to us in the future.”
The destination and city side of the equation is complex, driven by politics and policy decisions. As these superapps are able to aggregate more content, more cities and organizations will be likely be willing to come on board if the economics make sense.
“We see a move to these monster apps, whether that’s a scooter, car or hovercraft; there will be a way to do that through the city, and all these companies have become potential partners,” said Devin Patel, vice president of business development at Passport, a provider of mobility technology solutions to cities. “You’re going to see a huge fight from the Ubers and Google Maps of the world to own that. I see Lyft and Uber like the Anheuser-Buschs of the world; you have plenty of choices, but they are owned by one company. You are going to see that competition result in a lot of acquisitions.”
One has to think that once the trench warfare phase of mobility comes to an end, and large mobility platforms emerge with strong buy in from consumers, that the value proposition for corporate travel managers and business travelers will emerge.
Until that period of consolidation happens, though, ground transportation is likely to remain a chaotic and costly element in the corporate travel equation.
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Photo Credit: Over the last several months a handful of startups have dropped hundreds or thousands of electric scooters on the sidewalks in cities like San Francisco, Austin, and San Diego, allowing anyone who downloads an app to unlock and ride them across town for a small fee. David Paul Morris / Bloomberg
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