Rideshare and sustainability: Pros and cons for managed travel programs

The inclusion of rideshare solutions as part of a holistic business travel ground program is emerging, led in part by an increased focus on sustainability. Ryan Hohag, Director, Global Air and Car Practices at Advito, shares his insights.

How has demand for rideshare solutions in business travel changed, and why?

By Ryan Hohag, Director, Global Air and Car Practices, Advito

Historically, a lot of companies restricted rideshare from their travel policy or banned it altogether. We now see a growing demand for it. Some companies have revealed that in the last year, 90% or more of their ground volume for business travelers was with rideshare rather than rental car companies.

The pandemic has not only affected how travelers approach ground transportation, but it’s also had an impact on rental car availability, too. Facing global chip shortages and lingering supply issues, many rental car companies are still struggling to rebuild their fleets and meet demand. Because of these challenges don’t expect to see significant drops in rental car prices anytime soon.

What should stakeholders consider before adding rideshare to the ground program?

Before getting started, consider location, availability, regulations, cost comparisons, and sustainability. These will help shape the solutions used and help travelers make informed decisions on how they should approach the ground part of their trip.

Compare rideshare to rental cars and public transportation. Sometimes, it’s about avoiding the need to drive, and the related stress. For example, in larger, confusing cities with aggressive drivers, business travelers may be less comfortable renting a car and driving themselves. In that scenario, rideshare could be a good option.

There’s no obvious answer to what’s best for your travel policy. Take into consideration the specific needs of your program, your travelers and the kind of trips they’re taking.

You’ve mentioned the sustainability aspect as a rapidly evolving area. What’s new?

Rideshare is really coming into the spotlight as a component of corporate travel policies and incentives to reach sustainability goals. As this evolves, new partnerships emerge. For example, Hertz announced plans to buy 100,000 Teslas. This means Hertz will have the largest electric vehicle (EV) rental fleet in North America and, as a result, roughly one out of every five vehicles in Hertz’s entire global fleet will be electric.

Hertz also has a partnership with Uber. So, half of those cars, about 50,000 of them, are being offered for rent to Uber drivers. So far, over 15,000 Uber drivers have opted in to this program. In general, Uber seems to have done a bit more in this space than Lyft. For example, travelers can request an Uber Green – which guarantees your ride is in an electric vehicle – and contributes to your sustainability goals.

What are some of the pros and cons of choosing rideshare in business travel?

Cost is a driving factor when choosing to use rideshare over car rentals. Rental car prices are much higher now than they were pre-pandemic. If you’re on a long business trip where you don’t need a car every day, then a rental car may not be cost effective because you’re paying for it every single day, whether you use it or not. If you’re in an urban locale where you’re mostly using ground transport for shorter distances, for example from a hotel or conference center to a dinner, a five-minute Uber or Lyft is going to be cheaper. Plus, in certain international destinations, using rideshare can cut costs, because a company won’t be responsible for additional insurance or certain types of licenses.

A disadvantage of rideshare is unpredictable availability from location to location and during peak hours. For international locations, rideshare is subject to local regulations and is banned in some cities. These delays might affect traveler wellbeing. It’s worth noting, though, that some of the duty of care issues relating to rideshare (like adherence to COVID protocols, background checks, drug and alcohol testing) are improving.

What’s ahead for the rideshare space?

Rideshare’s integration with expense management tools and increased visibility into costs are improving. Companies like Uber aren’t transportation companies, they are tech companies, so they are well-positioned to make leaps in terms of FinTech partnerships. Some airline partnerships have emerged already where a traveler can link their mileage account and earn miles for ground trips.

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