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Corporate Travel and the Sharing Economy

Employees often feel pressure to minimize corporate travel costs. In an effort to save company dollars, many are turning to sharing economy services (such as Uber, Lyft and Airbnb). These collaborative consumption models allow peers to share their resources and time. They offer convenience and an average savings of 30% to 40% when compared to traditional hotel and cab services. Many people are using these options for personal travel, so it makes sense that they’d want to use them for business or corporate travel.

Sharing economy service providers are beginning to tailor their platforms to meet employer needs, so we expect this to become a growing trend in corporate travel. It’s important to understand the risks and benefits associated with these options, and to update your travel policies accordingly.corporate travel

Corporate Travel Policy – To Share or Not to Share?
According to a report by the Global Business Travel Association (GBTA), 50% of corporate travel policies allow employees to use ridesharing services, a jump from 44% in June 2016.¹ Home-sharing services are also permitted by more companies, up from 20% in June 2016 to 30% in January 2017.

An earlier GBTA survey indicated that 37% of business travelers thought home-sharing was allowed and 22% were unsure, suggesting that employees could be using these services against company policy. Employers need to determine if sharing economy services align with their business practices, update their travel policies and communicate new guidelines to their employees. Travel policies should always be designed around employee safety, but they should also be versatile enough to address the changing nature of corporate travel.

Sharing Economy
When drafting a policy that permits sharing economy services, consider the following questions:

  • Are there circumstances under which it is / isn’t acceptable to use these services? (i.e., some cities might be safer than others.)
  • Are sharing services legal under that particular jurisdiction? (i.e., some places have ordinances that prohibit charging rent for stays shorter than 30 days except for hotels, motels, etc.)
  • Has the provider been vetted for safety and other concerns?
  • Which services will be reimbursed and what supporting documentation will be required for reimbursement?
  • Are back-up plans available in the event a sharing service does not work out?
  • Does the corporate insurance policy cover employees while they are using these services?

Evolving for the Employer
Sharing economy service providers are taking steps to better address employer needs. Uber recently revamped their Uber for Business platform, making it easier for companies to enforce travel policies. Managers can create programs that limit corporate travel criteria (such as the type of car, number of riders and geographic limits). Through this app, managers can assign eligibility to employees and even create groups with different criteria. The app can help enforce limits by prompting an employee to add their personal payment information if a trip exceeds the company-set parameters.

Airbnb is also catering to corporate travel needs. Companies such as American Express Global Business Travel, BCD Travel and Carlson Wagonlit Travel will integrate the Airbnb for Business Travel platform into their systems, allowing corporate travelers to book stays with Airbnb. Airbnb for Business Travel is also integrating with Concur, a leading provider of travel, expense and invoice management solutions. This integration will help businesses more efficiently manage traveling programs through itineraries and e-receipts that are automatically fed into Concur’s expense report. As this niche continues to grow, Airbnb intends to make corporate travel 30% of its total business.

Here to Stay
In January 2017, President Trump signed the Modernizing Government Travel Act (H.R. 274), which ensures federal employees traveling on government business will be reimbursed for ride-sharing expenses. This has further increased the acceptance of sharing economy practices for corporate travel across the country. Combine that with the growing effort by service providers to address employer needs and it’s clear that this trend is here to stay. Now is the time to review your policies, update your guidelines and educate your employees. We encourage you to contact a member of our HR Consulting Team for assistance with your corporate travel policies.

¹ “GBTA Business Traveler Sentiment Index Global Report.” January 2017. Accessed on February 22, 2017 at
www.business.americanexpress.com/us/business-trends-and-insights/business-traveler/gbta-business-traveler-sentiment-index-jan-2017 

This article originally appeared in the 2018 | ISSUE ONE of the SilverLink magazine, under the title “Corporate Travel & Sharing Economy.” To receive a complimentary subscription to the SilverLink magazine, sign up here.

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