Ridesharing and Car Services May Join Forces Sooner Than You Think
Andrew Sheivachman, Skift
– Jul 20, 2016 6:00 am
The irony of this conversation, unfortunately for car services, is that ridesharing trips already account for nearly half of ground transportation spending expensed through U.S. companies. So the fingerpointing and recriminations continue.
— Andrew Sheivachman
The growth of the sharing economy in corporate travel has been a challenge for travel managers and travel management companies.
But it’s rare to see travel service providers square off in public on the battle between ridesharing services and traditional car services.
A feisty conversation between Lyft chief business officer David Baga and Scott Solombrino, president and CEO of car-service provider Dav El, at GBTA Convention 2016 yesterday showed the tension that travel managers face in making the case for a more inclusive travel policy involving the sharing economy.
Critics would say the discussion highlighted the evasiveness that companies like Uber and Lyft sometimes employ to get around questions about safety and regulatory mandates in ground transportation. It also highlighted the struggles that traditional car services face in remaining relevant to consumers and business travelers alike.
When the conversation began to cover safety requirements, both sides leveled their best arguments against each other. Solombrino’s company Dav El announced it would begin offering an on-demand mobile-user interface similar to Uber and Lyft, offering rides with full duty of care coverage.
“All we want is safety for people,” said Solombrino, “and a guarantee. We want to embrace these [ridesharing] companies and have them in our community, and if we’re going to that, they have to play by the rules that are established. That’s the differentiator.”
When Lyft’s Baga replied, he said that user adoption speaks for itself.
“I’m actually not allowed to make comparisons between their industry and our industry,” said Baga. “We are not the same industry. We are a [transportation networking company]. The people here are voting with their mobile phones every day and overwhelmingly in their personal lives choosing ridesharing and now 47 percent of business travel rides are ridesharing.”
Baga’s comments prompted widespread applause from the travel managers, buyers, and others on hand.
Solombrino then commented on the difference between personal and business travel.
“There is a whole different issue between corporate compliance and personal use,” said Solombrino. “We have drug testing protocols we’ve had for decades that are required, just like the airlines have had for years. Can you imagine if I opened an airline tomorrow and said, ‘I’m going to be a [transportation networking company] airline’ and therefore none of the rules are required to be enforced? If that’s what [corporate clients] want, then let’s take it out of the contracts and move forward together.”
CNN’s Richard Quest, the discussion’s moderator, then accused the car service space as being a “dinosaur” using duty of care to protect its place in the ecosystem.
“The evidence of that dinosaur-itis is the people moving to other services,” said Quest. “If they do not seem to be as concerned about duty of care as you are, it raises questions about your protectionism being masked as duty of care.”
“We may be a dinosaur today, right this second,” said Solombrino. “But we’re not standing dinosaurs, because we’re adapting. What they have invented along with their competitor is a new paradigm shift that we want to adopt.”
Then Solombrino went off script and spilled the beans: He had been approached by Lyft to potentially build a partnership between his car service and their ridesharing network, and had been rebuffed by Lyft when it came to instituting full duty of care standards.
“Without that, we’re never going to sell out our corporate travel client base,” said Solombrino. In response, car service companies are now going to team up and try to “drag the rest of the ridesharing industry” with them.