The face of corporate travel is changing. T&E has emerged as one of the most innovative areas in B2B payments, and travel technology saw massive interest among venture capitalists in 2015 — data from CB Insights published this month found $5.2 billion invested in the space, a 125 percent increase over that seen a year before.
Part of the funding boom can be attributed to travel and expense management’s adoption of mobile technologies. Corporate travelers are on the go, so it’s natural they would be some of the most eager to use solutions that move along with them.
That mobility has also led corporate travelers to embrace apps like Uber. T&E firm Certify revealed last November that Uber’s star continues to rise in the business travel market, and its Q3 2015 report found that — for the first time in the report’s history — Uber spending surpassed that of spending on rental cars, albeit only in Boston.
Certify’s latest report, out today (Jan. 21), takes a look back at the year in corporate travel technology. An assessment of more than 30 million receipts and expenses filed among corporate travelers shed light on just how massive the corporate market is for Uber and other on-demand services.
The Disruptive Trio: Uber, Lyft And Airbnb
"The Changing State of Business Travel" explored the $1.25 trillion spent and expensed by business travelers last year across the globe, as estimated by the Global Business Travel Association. Of that, $310 billion stems from U.S. corporate travel alone, analysts predict.
[bctt tweet="Certify explores the $1.25 trillion spent and expensed by business travelers last year."]
According to the report, taxis account for 3 percent of that spend, car rentals make up 5 percent and gas holds 11 percent.
But these traditional expenses are facing new threats and not just from Uber, although the ridesharing app did see an annual growth rate of 417 percent over FY2014 and FY2015.
Indeed, Certify’s newest report confirmed its quarterly figures hinted at in Q3 2015: Uber is now capturing more corporate spend than rental cars, as Uber rides accounted for 41 percent of corporate rides in the fourth quarter, compared to the 39 percent that were captured by car rentals.
Traditional taxis continued to slip in their portion of corporate rides, landing in at just 20 percent in Q4.
Uber rival Lyft, however, is also giving traditional taxis a run for their money. The company saw a 712 percent annual growth rate, and while it still captures only a fraction of the ground transportation that Uber does, both companies secured better ratings among business travelers than car rental and taxi services did.
The company’s report also confirms another trend that began to pop up last year. Certify’s Q3 2015 analysis first signaled Airbnb sinking its teeth into the corporate travel industry, with the data revealing some interesting patterns.
For instance, that report found that while Airbnb is far from a leading rival against traditional hotels when it comes to accommodation on business trips, business travelers that use Airbnb tend to stay twice as long as they do in hotels. That means corporate travelers are expensing twice as much money for their Airbnb stays than they are for their hotel stays, the analysis concluded.
"The Changing State of Business Travel" continued its coverage of Airbnb’s strengthening traction in the corporate travel market. Both at home and abroad, Airbnb saw a 259 percent annual growth rate, as Certify concluded that “Airbnb’s efforts to attract the corporate customer in 2015 seem to be paying off.”
More Disruption Ahead
These three services seem to be stealing the spotlight for business travel. The companies have recently taken to embracing their newfound popularity with the corporate nomad by adding B2B-centric features to their apps, like Uber’s recent launch of the Business Profiles feature, which allows corporate travelers to toggle between their personal and corporate Uber accounts more easily.
But as the three tech firms continue their momentum in T&E, 2016 could be a year that sees new startup rivals gaining ground in the corporate travel market.
[bctt tweet="2016 could be a year that sees new startup rivals gaining ground in T&E."]
Certify found that corporate spend on other services HotelTonight, WeWork, Postmates and DoorDash is on the up across the board.
It shouldn’t come as much of a surprise, however. HotelTonight recently paired with another T&E firm, Concur (which also partnered with Lyft), to streamline corporate travelers’ access to last-minute hotel booking services and integrate that booking into the expense management process.
The year ahead will probably see the continuing growth of Uber in the business travel segment. As for the rest of these solutions — and the appearance of new tech startups — it could be anyone’s game, as these services, once assumed to be solely for the consumer, now eye the potential of T&E.