We need to talk about Uber. The ride-sharing app is taking over the U.S. market and not just with consumers. In only the last few months, corporate travelers have been flocking to Uber like never before.
Travel and expense management firm Certify knows this well. Each quarter, the company aggregates all of the data flowing through its cloud-based platform and organizes it into the SpendSmart report, which breaks down trends in corporate travel spend.
The most recent report for Q3 2015 revealed that Uber is not only on the rise among corporate travelers, but for the first time in the report’s history, spending on Uber overtook that of rental cars in one market — Boston.
According to Certify CEO Bob Neveu, a big part of this Uber adoption has to do with changing corporate policy on employee spend. That’s a timely conclusion, considering Certify’s rollout of its Mobile Instant Policy Check tool, a way for employees to check whether the purchase they just made while on a business trip is in line with their company’s policies.
One challenge, Neveu told PYMNTS in a recent interview, is that business spend policy can be slow to adapt to new market innovations.
Even just a few years ago, many corporations weren’t allowing their employees to use Uber, for example. “Generally speaking,” Neveu said, “large companies take longer to make changes like this. They need to socialize it and make sure it’s a good fit for the company.”
[bctt tweet=”Large companies take longer to make changes.”]
He added that Uber’s ability to back up, statistically, its reliability has been key in getting some of the larger corporations in the U.S. to add Uber onto their list of approved vendors with which their employees can do business while on a trip.
Employee behavior in their personal lives has also been key to getting businesses to allow use of the service, the Certify CEO added. Especially thanks to the convenience when it comes to payment, Uber is largely considered a “no-brainer” for corporate travelers, whether they’re using a corporate card through the app or a personal card that they then plan to expense out to their company. And once a corporation adds an on-demand service like Uber to their list of approved vendors, “the amount of users goes through the roof,” Neveu said.
The ride-sharing app’s popularity in the business world can speak volumes for the relationship between corporate travel and the on-demand economy.
For example, the geographical trends of corporate travel adoption of these services coincides with the markets with faster adoption rates of technological innovation. Boston and San Francisco, Neveu said, are particularly quick to adopt these tools. In Boston, corporate travelers using Certify spent more on Uber than they did on rental car services for the first time.
“You’re going to find faster adoption rates in tech-related regions,” Neveu told PYMNTS.
Certify’s latest quarterly analysis also found that on-demand room rental service Airbnb is also gaining ground among business travelers, though in very specific contexts. When travelers are staying in a big group or staying for an extended period of time, corporate travelers will consider Airbnb; for short stays, hotels win out. Neveu said he believes that will always be the case.
Airbnb also speaks to the role of regulation in corporate travel, too. Recent local crackdowns of the service, along with the ongoing feud over Uber, could make or break an on-demand app. But the regulations of a specific corporation, Certify’s research suggests, also has a significant impact on the success of these on-demand companies.
Certify is circling around the importance of corporate travel policy with its newest tool, Mobile Instant Policy Check, released last week. The service can notify an employee as soon as a purchase is made whether that purchase was within corporate policy or not.
Neveu explained that the solution is all about saving time and money at a point of the travel and expense management process that even other cloud-based T&E services haven’t yet been able to tackle.
“My company and my competitors all have corporate travel policies built into our product. That’s one of the reasons businesses use a cloud-based travel and expense management tool,” he said. The problem is that even when policy rules are integrated into such a service, purchases more often aren’t flagged as being out of policy until days or even weeks after that transaction actually occurred.
The capability means travelers can more quickly modify their own behavior to align with corporate rules, which leads to saving the business money. “What happens is behavior modification on the user side as a result of being notified of policy encroachments on a regular basis,” the executive noted.
[bctt tweet=”Behavior modification on the user side results from being notified of policy encroachments.”]
The automation of it, Neveu added, reduces errors and bottlenecks at the point of manual data entry, further saving a company time and money. “The reduction of time is so critical for a business traveler,” Neveu stated.
The new service may highlight the effect corporations can have on modifying employee spending habits, but Certify’s latest study also points to the impact employee spending habits have on corporate policy. And that relationship comes full circle as businesses slowly recognize that players in the sharing economy can be a great fit for their staff.
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