Operations

What If Your Corporate Clients Ask About Using Uber?

Posted on July 17, 2015 by John M. Greene

Forty years ago, we let our “fingers do the walking” through the Yellow Pages. Today, these fingers are walking across a smartphone screen as our customers now have at their fingertips the technology needed to ease their transportation experiences, and make them stress-free and cost-effective. Unfortunately, we’re not the only transportation providers they interact with.

Transportation network companies (TNCs) such as Uber — the mobile app-based reservation system that allows a customer to request a vehicle on demand — has taken technology to a level that affects our business. For instance, a young couple exits a restaurant after dinner and taps the Uber app to summon a car to take them across town to their apartment. Maybe a group of guys leave a club after last call and need a quick ride to someplace with a later last call. Hit an app, jump in a car.

If your limousine company makes the bulk of its income on this type of casual business, it’s easy to see how Uber has squeezed your revenue. Maybe in some ways limousine companies that rely more on corporate clients for their bread-and-butter feel a bit detached from the furor because they believe their clients would never “stoop” to using an Uber service.

This is mostly true, particularly when it comes to the quality of the drivers, which I will address below. But are we taking a “head in the sand” approach in thinking there’s some kind of alligator-filled moat between Uber and our largest corporate client?

According to the international travel website BUSINESS REPORT, in March 2015, Uber accounted for 47% of all rides expensed by employees whose companies use Certify, the second-largest provider of travel and expense management software in North America. In March 2014, Uber accounted for only 15%. During that period, the amount spent on traditional taxis, limousines, and airport shuttles fell from 85% to 52% of expensed rides.

“Uber has changed the dynamic of business travel,” says Robert Neveu, Certify’s CEO. “They were first to market with a phenomenal service; they expanded rapidly, and the results are that users are adopting the heck out of it.”

To pour more fuel onto the corporate fire, Uber has added several features catering to businesses in the last year. The company teamed up with American Express, a credit-card widely used among corporate finance departments, and has launched a service called Uber for Business that lets companies set up corporate accounts and allows employees to charge their rides to employers. “Hundreds of businesses join every week,” one Uber spokesman said.

So aside from adding more alligators, how do we convince our corporate clients that they are best served by keeping the status quo, that in dealing with Uber it’s really a case of, “If it’s too good to be true, it probably isn’t?” The best place to start is the Uber terms and conditions statement, which reads; “You understand, therefore, that by using the application and the service, you may be exposed to transportation that is potentially dangerous, offensive, harmful to minors, unsafe or otherwise objectionable, and that you use the application and the service at your own risk.”

Well, there’s a red flag if there ever was one. You might as well flash a message on the customer’s iPhone stating, “Thank you for contacting Uber. Your driver, Charles Manson, will be arriving shortly.”

This is not to imply that all Uber drivers are serial killers, and I would venture to guess that most are hard-working, honest folks. But the stories, which seem to pop up like weeds, come fast and furious. We read about a passenger being attacked by a driver with a hammer, a girl in Chicago who ended up dead at the hands of an Uber driver, and an Uber driver in Houston who took a passenger to his home and raped her. The police discover the Uber driver had no Houston City permits, no windshield sticker, no CDL or For-Hire Vehicle Driver’s License, no fingerprints, no drug test, and no police department background check.

Such reports drive home the fact that Uber does not have the vetting process for licensed chauffeurs. They are independent contractors fighting each other for the next fare. There are no significant background checks, and anyone who has a car and license to drive it could be pulling up to you. If that’s the case, you must ask yourself, as the CEO of a company, do you want your key valued employees to climb inside?

We stress to our corporate clients, as well as Travel Management Companies (TMC’s) we work with, who are obviously aware of the price difference in livery service and Uber, the time-tested cliché, “You get what you pay for.” Where is the price break when it comes to your employee’s safety? Isn’t it important to know the vehicle you are trusting them to be in has documented reports of continued upkeep and maintenance, and that all insurance policies are posted and ready for inspection?

Is it worth taking a chance that your key vice president who needs to get to a meeting on time to seal a big deal could be driving in a car that is used on weekends in stock car races, equipped with an engine that’s about 20 miles away from literally melting down? Your client needs to think of Uber as what it really is; just another version of a taxi service, a nameless, faceless car roaming the streets waiting to be electronically hailed. It’s a crapshoot on wheels as opposed to working with drivers (chauffeurs!) who they are familiar with because of past rides.

Uber is here to stay and it has the financial resources to fight for the long-haul. As an industry, it is important to show a unified front and get our lawmakers to work on our behalf. Part of this strategy is to form alliances with other ground transportation companies in your region, pool your resources, and hire lobbyists and other political influencers on your behalf. We pride ourselves on our well-maintained cars, but now is the time to be a squeaky wheel.

It also helps that associations like the National Limousine Association and its safety initiative, RideResponsibly.org, have come out as a strong voice against Uber. It’s hard to get a read on what side of the fence influential organizations like the Global Business Travel Association are leaning toward. The GBTA allowed Uber to be a sponsor and exhibitor at its 2014 annual convention in Los Angeles, and gave them room to hold a press conference announcing Uber For Business.

There is no denying that Uber has seriously dipped its toes in the corporate waters. It’s up to us to continue to deliver the service, the chauffeurs, the vehicles, and the peace of mind to our corporate clients so they never even think of Uber as an alternative. Delivering all this, which should be in our corporate DNA as limousine operators anyway, will be much easier and more effective than trying to compete with price cuts and spotty service.

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