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Corporate Liability: Still the Biggest Issue for Sharing Economy Suppliers


Posted by Kevin Iwamoto on 05/15/2015

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by Kevin Iwamoto

I recently read Matt Alderton’s interesting article in “Successful Meetings” — in which the author asks whether companies like Uber and Lyft can accurately self-regulate driver background checks. The article references a recent whitepaper — filed by the City of Houston’s Department of Administration and Regulatory Affairs  — which challenges the accuracy and current status of drivers as reported by those companies.

While it’s one thing to conveniently book a ride using an app on your smartphone, this activity presents a challenging scenario for travel and procurement buyers — who must address the corporate liability issue of allowing business travelers and meeting attendees to use these services.  

To avoid costly and negative PR if something goes wrong with one of your travelers during the course of business travel or meetings activity, you have to address this issue before modifying corporate policy to allow for booking through these Sharing Economy channels.

Some travel buyers have told me that this is constantly raised during discussions with the Sharing Economy suppliers when setting up a corporate account. Several of them have gone on record saying they understand this concern, and are working with vendors and clients to adequately address these issues. Unlike the general industry impression that travel and meetings procurement is all about cost reduction, I would say that it’s equally as focused on corporate liability and risk mitigation — wherever it comes from.

So the debate continues. And according to the latest study conducted by expense tool company Certify, charges on mobile-based transportation networks rose 2 percentage points to represent 5 percent of "general expenses."

Like I’ve predicted before, all of the Sharing Economy suppliers are targeting the lucrative corporate business and meetings/events marketplace. However, until they can sufficiently address and mitigate the risks associated with their employees, drivers, etc., corporations will be very cautious about including them in their standard travel and meetings policies and programs.

 
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