Leadership and career

Sharing Economy: The Next Frontier for Business Travel?

By December 23, 2016 No Comments

By: Austin Klein

There are many names for the Ubers, Lyfts and Airbnbs of today – common classifications include the sharing economy, gig economy and on-demand economy. These services have paved the way for innovation in everyday travel by reducing the cost for consumers and easing the accessibility of services. While the perks remain the same for business travel, the sharing economy poses new safety and liability concerns for companies. But what are companies going to do when their business travelers opt for these cost-saving options instead of traditional services and hotels?

Companies shouldn’t look the other way when devising an approach for managing business travelers who use the sharing economy. Instead, companies can incorporate sharing economy travel means into its policies, tailoring the protocol based on how employees will be utilizing sharing economy travel.

While business travel in the on-demand economy presents similar risks as traditional options – car accidents, false expense reports and duty of care responsibilities – business travel in the on-demand economy amplifies pre-existing liabilities. In the case of a car accident, would the employer, driver or ride-sharing app company be held accountable for a business traveler’s medical bill. And who would be held responsible if a break-in occurred at an Airbnb rental? Companies can begin to mitigate risk by addressing these concerns before anything happens.

In the creation of a sharing economy travel policy, collaboration should exist between risk managers, legal departments and HR teams. Together, they can create a formal vetting process that considers a multitude of ends and can roll out a uniform set of standards.

Mitigate Risk

One option for integrating the sharing economy while mitigating foreseeable risk is to install a policy based on ratings. A crowd-sourced rating system is one of the many native features of sharing economy apps. Companies can predetermine a benchmark rating for Uber, Lyft or Airbnb services. For example, companies could require employees to take a Lyft or Uber ride with a driver who has no less than a four-star rating.

But creating a low-risk policy for modern business travel has its own inherent challenges for businesses. There are minimal options in place for measuring against a policy. Airbnb is a little easier to measure than ride-sharing apps because room-stay services are generally booked further in advance than a car ride to the office. Users can see a driver’s rating before taking an Uber, but a company might not know the rating of an Uber driver until after the fact, even with the new advance booking feature. For this reason, companies need a way to quantify and measure employee behavior within the sharing economy.

Streamline Policies

While some sharing economy suppliers have begun to develop services for business travelers, not all services have a way for companies to ensure their travelers are complying. Uber has a business feature that allows companies to invite employees to one account, enabling businesses to streamline expense reports and set restrictions on the hours company-paid cars are available. But the business feature does not allow employers to see driver ratings, which would create a challenge for companies looking to implement a rating-based system.

If an employee breaks compliance policies by taking a ride that did not meet the benchmark rating, is it justifiable? What if he or she was running late to a client meeting and took the first available Uber – would a company prefer to have its traveler be late or stay within policy? No company wants to obstruct its employee’s ability to get from point A to point B and in having standards set out, all scenarios and “what if” questions can be answered beforehand.

While some companies may prefer employees not use sharing economy services, it is important to adjust for the modern traveler in order to remain agile in a shifting landscape. Ultimately, it is the company’s prerogative to integrate the sharing economy into its business as much or as little as it likes.

The sharing economy presents unlimited, on-demand opportunities for safe travel, money savings and flexibility. Prohibiting sharing economy services will only drive employees to seek them out or to go around their employers. Companies need a policy that meets in the middle, one that protects the safety of its employees and allows its travelers to experience the flexibility they want.

Austin KleinAustin Klein is a Product Manager at Runzheimer, where he’s worked since 2008. Austin is an expert in business travel and procurement, working with HR, Finance, Procurement and Operations leaders to develop automated expense management and travel solutions that produce cost savings and efficiencies.

Published by Conselium Executive Search, the global leader in compliance search.  

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