The gains and pains of the sharing economy

Although the sharing economy hasn’t had a huge impact on the South African corporate market yet, the trend is slowly starting to emerge with especially Uber becoming a popular option for corporates.

The sharing economy can be a bit of a headache for TMCs and Travel Buyers, as sharing suppliers are rarely included in the corporate travel policy. There are several key considerations when determining if a sharing economy supplier is right for a travel programme.

TMC Carlson Wagonlit Travel shared 10 potential advantages and disadvantages to consider in an article in Buying Business Travel.

Potential Pains

1. Corporate Culture and Traveller Fit

Consider alignment with all travel program components, as well as with overall company philosophy, and the willingness of travellers, young and old, to try something new.

2. Duty of Care

Sharing economy properties and transportation are not always licensed, inspected, or regulated. Buyers must ensure all approved properties are safe and secure.

3. Evolving Regulations

Understand current and changing regulations in key markets along with the related effect on pricing, ease of use, and flexibility. New York ruled that nearly 75% of Airbnb’s listings between 2010 and 2014 were “illegal hotels”.

4. Traveller Inconvenience/Cost Transfer

Weigh the pros and cons of the sharing economy. It could be time-consuming to select trustworthy vendors. Sharing economy accommodations also don’t include amenities that traditional hotels offer such as meals and concierge services.

5. Program Cannibalisation

Analyse the point at which sharing economy usage jeopardises established discounts with other suppliers.

Potential Gains

1. Savings

Uber for Business suggests fares average 40-60% less than a taxi in most major cities.

2. Traveller Experience

Get even more mobile as sharing economy providers transform the users’ experience through slick and simple mobile interfaces, cash-free transactions, feedback and ratings.

3. Supply

Consider additional supply as Airbnb asserts an estimated 550,000 accommodation options or inventory, which makes it in the top five for all hospitality brands considered. Uber is present in 330+ cities in 60+ countries with 100k+ driver partners.

4. Central Billing

Review new functionality as key sharing economy suppliers now market a central billing option on their business travel platforms allowing corporations to streamline payment for all travellers.

5. Reporting

Compare functionality as key sharing economy suppliers market a new offering with detailed reports on traveller usage, total cost and traveller ratings.