Uber über alles? Ride-hailing services are coming on stronger than ever.

Business travelers have spoken with their wallets.

Uber logoIt looks as if a major milestone has been reached in the battle between “old world taxis” and “new world Uber.” An expense report study covering the second quarter of 2015 is showing that Uber and other ride-hailing services have overtaken the use of taxis – at least when it comes to business travelers.

The quarterly report was released by Certify, an expense management system provider. It reveals that Uber accounted for ~55% of ground transportation receipts, whereas taxi services accounted for only ~43% of receipts.

That’s a big jump from previous quarters; taxi services long dominated, staying well above 50% as recently as the first quarter of this year.

And this report isn’t based on some small data set, either. Certify’s stats are derived from millions of trip receipts submitted by its North American client base – nearly 30 million receipts over the course of a single year.

Clearly, Uber and other services that connect travelers through smartphone apps have succeeded beyond many people’s expectations.

But not everyone is pleased – beginning with taxicab services and their political allies.  Understandably, they’re frightened by the prospects of seeing the most fundamental tenets of their “business protection plan” melt away before their very eyes.

Depending on how people come down on the issue, opinions can be particularly passionate. Consider these responses prompted by a recent AP article on the topic published by ABC News:

Pro-Taxi Reader: Uber is breaking laws and evading taxes and municipal dues on a mass scale. How do you “adapt” to that? How to adapt to this unfairness and criminality? I personally suggest stop paying taxes, or start a strike like they did in Paris. It seems that in [the] U.S., Uber’s lobbyists and endless BS-PR campaigns control the country.

Pro-Uber Reader: Is it really “fair” for a city to charge one million dollars to have a taxi license (New York City)? Most of the taxi BS is from mafia-run business[es] who have fought for the last 70 years to keep competition out.

Another Pro-Uber Reader: The current system of licensing taxis should be reconsidered.  This system smacks of monopolies, with barriers to entry that are impossible.  There is no free market when you can’t get a license to operate.

Certain national politicians are even getting into the game, finding fodder for campaign rhetoric aimed at constituents who are frightened by the implications of the new work paradigm.

Here’s an excerpt from a speech by Hillary Clinton:

“Many Americans are making extra money renting out a small room, designing websites, selling products they design themselves at home, or even driving their own car. … This on-demand, or so-called ‘gig economy,’ is creating exciting opportunities and unleashing innovation. But it’s also raising hard questions about workplace protections and what a good job will look like in the future.”

These are good points to raise, and it’s certainly fine to weigh the pros and cons of the so-called “new economy.”

At the same time, it’s pretty ironic to see how people supporting a candidate who questions ride-hailing services are so “onboard” with Uber – at least in practice if not in their rhetoric.

To illustrate, take a look at these Federal Election Commission filings from the Ready PAC (the pro-Clinton SuperPAC formerly known as Ready for Hillary PAC) here and here and here.  There’s a “whole lotta Uber” going on!

Getting back to the real world of business travel, in nearly every city, Uber is offering better pricing than taxi services – at least when it comes to services like UberX which typically involve transport in smaller cars like a Honda Civic or Toyota Camry.

SUVs and limo cars are pricier, of course, and may not represent a major cost improvement. And Uber’s prices charged also rise during periods of “surge” usage.

taxi cabBut considering the comparative cost as well as the quality of service, in some markets Uber beats out taxis by a city mile.

How else to explain results in the most recent quarter where ~60% of rides in Dallas expensed through Certify were for Uber vehicles rather than taxis. In San Francisco, Uber’s share was even higher:  nearly 80%.

No wonder taxi services are running off to local elected officials, boards and commissioners to try to shore up their faltering business model.

It’s worth noting that some employers harbor reservations about ride-hailing services — particularly concerns about lack of regulation, safety and liability. But even in non-regulated locations, protections exist. Uber as well as Lyft, another industry participant, provide driver insurance during paid rides, and they require drivers to carry their own personal auto insurance as well.

It would be interesting to hear the views of people who have used Uber or other ride-hailing services. Do you see them as the wave of the future? Or are there drawbacks? Please share your experiences and observations with other readers here.

Frequent flyer programs: No longer going the distance.

What took so long?

frequent flyer programsDelta and United Airlines have announced what they hope will be an industry-pacesetting change in the way frequent flyer programs are administered by the world’s biggest airlines.

The two air passenger carriers are shifting away from awarding points based on flight distance, and instead will award points based on the actual airfare paid by the traveler.

The change in procedures will become effective in 2015 (in January for Delta and in March for United).

In retrospect, one wonders why it took so long for the big airlines to make this move.

After all, the very nature of loyalty programs is to reward a company’s best and most profitable customers.

Business travelers who book a flight a few days ahead – not to mention people who prefer to travel first class – are far more valuable to an airline than someone who books the “Cheapy Charlie” web-only fare months in advance.

Besides, prominent low-cost air carriers like JetBlue, Southwest and Virgin have been using revenue-based methods of calculating their frequent-flier points for a good while now.

As for which types of travelers will come out winners vs. losers in the frequent flyer program changes, it’s exactly who you’d expect:

  • Big Winners:  Business passengers traveling internationally and on refundable-fare domestic flights + first-class passengers.
  • Big Losers:  Leisure fliers in coach class + business flyers who travel on cheap fares.
  • In-Betweeners:  Business passengers who travel using a mix of business and economy fares.

The recent announcements by Delta and United leave only American Airlines as the last big U.S.-based global carrier that still maintains the traditional distance-based calculation for earning miles.

I wonder how much longer they’ll hold out?

Only a matter of months, I’m guessing.

What are your opinions about the changing policies?  Are there particular frequent flyer programs you love?  … Or love to hate?  Feel free to share your thoughts with other readers.

Conference Centers to the Fore

What a difference a few months make. “Way back” in 2008, high-end resort properties in exotic locations were doing a healthy business hosting corporate events. Large corporations have long been a core resort customer segment that has delivered volume business year after year – major contributors to the bottom line even as resorts have also attracted their share of weddings and other smaller events.

The economic meltdown has now brought hugely negative publicity to corporate events held at resorts, the result of news reports that federal government bailout money has gone to pay for them. These events have been described by politicians and the press as “outrageous,” “excessive,” “junkets” and “boondoggles” – places where well-heeled business types get to wine and dine and cavort in the sun on the taxpayer’s dollar.

Even the AFL-CIO union hasn’t been immune to the criticism, coming under fire for holding its annual convention at the exclusive Fontainbleau Hilton resort property in Miami Beach.

While one can certainly fault these companies and organizations for being politically tone-deaf, the fact is that business does get carried out at these events. Even in today’s electronic age, it is still important to organize face-to-face get-togethers on a regular basis.

Enter the Conference Center. This corner of the hospitality industry, long relegated to backwater status, has consistently labored under the image of being far less impressive and exciting than the resort segment. Now, sensing an opening, conference centers are making their move. They’re promoting themselves as a preferred location for serious business events – far away from tourist attractions or white sand beaches, extreme recreation or other distractions (the ubiquitous golf being the exception).

Properties like the Marriott Aspen Wye Conference Center in Maryland and the Wyndham Princeton Forrestal Conference Center in New Jersey are stepping up promotion, as is the International Association of Conference Centers. The basic message is that conference center properties are the places where productive meetings take place, free of distractions. “Serious-minded meetings are in … posh or over-the-top venues are out” is the order of the day.

Plus, right now it just sounds a lot better from a PR standpoint if you can report that your corporate event is being held in a location five miles from Trenton, New Jersey.