B2B Payments

Where The Paths Of Fleet And Corporate Travel Management Intersect

Lyft made progress over its rival Uber this year when corporate travel and expense management firm Certify released data that found a 9 percent increase in the percentage of Lyft ride-hailing trips expensed on its platform.

Uber still holds 81 percent of the corporate ride-hailing market that passes through Certify, but the statistic was another win for the company that continues to strengthen itself against its rival, particularly in the business services space.

In April, Lyft posted more than $1 billion in revenue growth for 2017, marking a 168 percent revenue increase for the quarter alone.

“We will carry this momentum into the rest of 2018 and remain focused on making business travel easy, accessible and affordable,” David Baga, Lyft’s chief business officer, wrote in a statement emailed to Bloomberg, which covered the Certify report.

The ride-hailing and ground transportation competition in the U.S. not only demonstrates the role of corporate travel for these segments, but also highlights the importance of collaboration between companies like Lyft and Uber to gain more traction in the industry.

Lyft's latest partnership in this effort was announced only days ago, when the company revealed an integration with LeasePlan, a fleet management service provider that offers a Car-as-a-Service business model to businesses using company cars for employee travel.

Despite the rise of on-demand ground transportation among business users, company cars are still popular tools for the enterprise. A report from XpertHR published last year found that more than 71 percent of companies use them.

In a recent interview with PYMNTS, LeasePlan chief commercial officer Ricardo Fonzaghi described the integration as "simple" – when a corporate car is out for repairs or unavailable, clients can link their employees to Lyft services. Rides are then automatically expensed via the LeasePlan platform.

It solves a pain point, Fonzaghi said, that can quickly rack up expenses for businesses: reliance on rental cars.

Say, for instance, an employee flies into New York's LaGuardia airport and needs to travel to a meeting or two, but a company car is unavailable. Typically, said Fonzaghi, workers would rent a car. He noted that as a manager, he's had to approve expense filings for more than $100 for employees using a rental car for a quick drive to an hour-long meeting.

"It just drives me crazy," he said. "Now we have an alternative that is financially viable."

Financial management of employee transportation is critical to fleet managers; data, Fonzaghi emphasized, is critical to that financial management.

"It's not a challenge [with LeasePlan] to access data, and provide clients will full visibility of costs regarding every aspect of their fleets," he said. "One of my objectives is to empower our clients to make better decisions. The most important thing is to provide our clients with the power of information."

Without sophisticated technologies, fleet managers have a nearly impossible task of managing fuel spend and driver expenses, especially when drivers can sometimes mix personal and private lives while using a company vehicle. According to Runzheimer executive Donna Koppensteiner, who spoke with PYMNTS about fleet spend last October, as much as 30 percent of a fleet vehicle use is for personal purposes.

The rise of cloud-based spend management, Internet of Things-connected vehicles, real-time analytics and other technologies is increasing fleet managers' visibility into fleet costs. Fonzaghi said access to data empowers those managers to make strategic decisions on the insights delivered (or, he noted, LeasePlan can deploy internal experts to make strategic moves on behalf of their clients).

If the increasing use of Big Data by fleet managers for spend management and cost optimization seems familiar, it's because the exact same objectives are becoming more important for corporate travel managers, too. Fonzaghi noted that these two departments are undeniably linked but rarely work together, and understand that they are often pushing toward the same goals.

"Companies have the travel manager and the fleet manager, and usually they are not sitting under the same roof," he said. "They access the same data, but for a different purpose – but they have a common need.

"What's the common need?" he continued. "To get from Point A to Point B the cheapest way, the quickest way and with the highest level of optimization."

There is a "converging point," Fonzaghi added, which offers the opportunity for even greater corporate spend optimization. This is becoming more important as fleet management technology advances, too, he said.

The last 10 years combined, said Fonzaghi, haven't brought the level of innovation the fleet management space has seen in the last year-and-a-half alone.

Moving forward, he expects this explosion of innovation to continue – and for the fleet management space to continue identifying overlaps and other applications in all areas of the enterprise, including corporate travel management.

One trend in the fleet management space Fonzaghi identified is the shift toward electric vehicles. Last year, 10 major multinational corporations launched the EV100 global initiative to increase the number of electric vehicles used in their fleets. Unilever, one participant of the initiative, vowed to use an entirely electric fleet by 2030. The aforementioned survey from XpertHR also found that a fifth of businesses plan to introduce "ultra-low emission vehicles" sometime in the future.

Even more recently, Lyft announced in April that, effective immediately, all of its rides would be carbon neutral.

Fonzaghi said LeasePlan - one of the founding members of EV100 - also has its own electric vehicle initiative in the works.

"Within the next few years we plan to achieve net zero emissions," he said.

These efforts are, of course, a social sustainability and wellness initiative. But the switch to electric vehicles is also a push to reduce fuel spend. Research from Teletrac Navman found last year that 39 percent of fleets say reducing costs was a priority in 2017, with fluctuating fuel costs a major challenge for fleet managers.

Amid these industry shifts and technological advances, Fonzaghi added that fleet and travel managers will increasingly find their jobs converge.

"To evolve and survive in this environment," he said, "they'll have to become mobility managers."



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