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Sharing economy: this is just the beginning

17 MARCH, 2016

Over the last five years, the sharing economy has had a major impact on the lodging and ground transportation industries, revolutionising users' habits in the process. As brands adapt their offerings to the managed travel market, barriers to use in the managed travel are coming down. Companies ignore the sharing economy at their peril!
 

Whether they know it or not, companies should be aware that corporate travellers may already be using these services. According to Fortune Magazine, the number of transactions captured by one large expense management company in its expense reporting tool multiplied by five for Uber taxi services and by 27 for Airbnb rentals over a year. All the signs are pointing to further growth in managed travel, particularly in ground transportation.
 

As could be expected, the use of sharing economy services is higher among millennial travellers. Twice as many of these travellers have used sharing economy services for business travel, and more have used them for ground transportation than for accommodation. 

Several factors are driving the growth of the sharing economy
 

Cost It is no coincidence this business model sprang up during the global economic crisis, offering new revenue streams to sellers and often cheaper services to buyers. While the economy has now turned the corner, the cost focus of recent years has remained a priority.
 

• Supply and demand dynamics Airbnb started up in the San Francisco market, where accommodation is notoriously in short supply. Similarly, the idea for Uber is said to have come to its Silicon Valley founder as he was trying to find a taxi in Paris rush hour.
 

• Convenience Technology and social media have provided a catalyst for the sharing economy. Uber's location-based app allows users to order an immediate pick-up from a simple mobile app, while both passengers and drivers can leave ratings on their experience to share with others. In comparison, competing apps launched by traditional taxi services have not always been well received in terms of user-friendliness which continues to grow in importance.
 

• A tailored experience Users expect increasingly customised experiences, whether in terms of the technology interface or the products and services offered. Despite offering a more personal "home-from-home", the Airbnb “experience” is not necessarily a key selling point for business people who want convenience above all. However, we should not forget the growing "bleisure", or business and leisure travel trend, where business travellers extend their stay to take advantage of being in their destination.
 

• Tailored business offerings Major sharing economy brands have taken note of the managed travel niche and are starting to tailor their offerings.
 

How are sharing economy brands adapting their offerings to managed travel?
 

A slew of new features are making it easier for companies to integrate sharing economy options into their programs, factoring in billing, reporting and expense management.

These include:

• Direct billing For example, Uber for Business offers direct billing, along with different electronic payment methods.
 

• Reporting data Both Uber and Airbnb offer access to spending data, and Uber offers full details on individual trips.
 

• Integrated expense management Concur's TripLink solution enables travellers to book Airbnb properties directly and have their expense reports pre-populated with basic data.
 

• Integration with airlines Uber has partnered with companies such as United Airlines so that travellers may book ground transportation within the same app. While this does not necessarily help keep travellers within a managed travel booking environment, we can imagine greater integration with managed bookings in the future.

 

What about safety and security concerns?
 

One of the biggest barriers to more widespread adoption by business travellers is the perception that safety and security risks may be higher in the sharing economy than classic travel solutions. This is the primary concern for surveyed travellers who have tried sharing economy travel solutions and this concern is even more marked among travel managers.
 

Although valid, these concerns should be put into perspective. Each sharing economy brand has its advantages and disadvantages but providers and legislators are working to reassure people and offset the risks.
 

• Around the world, local laws have been passed on car sharing, placing the responsibility for insurance on the shoulders of brands and their insurers.
 

• The sharing economy model enables users and providers to share ratings and information on their experiences as a way to self-regulate.
 

• Brands also provide guidelines to users to help them avoid fraud, while tackling reported complaints efficiently to exclude offenders.
 

So if these new ways of travelling are here to stay, the question we could ask should be “how” rather than “should” we incorporate them into business travel policies.