Mobile Apps for corporate car transportation are here to stay but you must avoid some of the pitfalls

Mobile AppsMobile Apps for booking corporate black car/limousine or yellow taxi transportation have picked up steam in the New York City market, in particular with the advent of Uber three years ago (2011). Use of these applications will expand even further with the eventual rollout of the eHail yellow taxi application pilot program in New York City now that an injunction has been overturned.

Applications like Uber, Hail O and Taxi Magic will be participating in a one-year pilot which will allow pedestrians to book a yellow taxi for immediately pickup in certain zones of New York City via their smart phones or tablets. But these applications are primarily targeted at the consumer, not corporate.

But there is a distinction between the mobile applications that target yellow taxis as in the pilot and the mobile applications that target the corporate ground or livery target market. Yellow taxis have precedence for use by corporate users, even for business purposes at times, an accepted corporate practice.  Many Corporations support use of yellow taxis for some business use in particular because they are often lower cost than livery or corporate black car services on short routes and can be easily put on their expense account, now that credit cards are accepted in all yellow taxis.

Services like Uber are invading the corporate territory competing with corporate black car services, not yellow taxis, by targeting corporate users from the consumer side.

Consumers are also corporate employees and the “consumerism” of business applications and devices, have already invaded the corporate space. Apple and Droid Smart Phones and Tablets, sold in millions to consumers who also happen to be corporate employees, have invaded corporate IT in droves. But IT security risks have limited their adoption in the business place on firm networks.

Similarly, mobile ground transportation booking applications, which are fun, funky and user friendly (many are “one click”) and which a targeted to the same demographic that purchased all the Apple/Droid mobile devices, are invading existing corporate car booking processes, siphoning away business from existing corporate black car suppliers.

Operating as “rogue” alternatives to contracted/preferred Corporate ground transportation vendors, one mobile operator in particular, Uber, has brought the ire of Corporate Procurement officials who are tasked with monitoring and maintaining corporate approved vendors and contracts as the corporate watchdog.

What are some of the pitfalls of the corporate car mobile apps?

  • By definition, the mobile application providers, some of whom provide their own fulfillment/vehicles, are not approved vendors for the corporations whose employees they target, often for business rides that take business away from approved, contracted vendors.
  • Employees who use these mobile applications are often in violation of corporate company policy if the mobile app vendors are not approved vendors.
  • The mobile booking applications may be higher priced than their existing corporate ground transportation contracted vendors during certain times of the day, certain routes.  In any event, there is no published tariff to rate shop vs. their corporate approved vendors.
  • With no published rate tariff nor any necessary conformity to a rate tariff, in some cases, it was observed recently that for the identical itinerary taken three days in a row by the same passenger, he was charged three different rates. That doesn’t happen in a corporate ground transportation program with pre-established rates.
  • Mobile application providers excuse themselves from any liability or risk from providing the service as their drivers are owner-operators. This unlike the corporate black car providers who provide insurance, services to drivers and corporate clients alike.
  • Mobile applications are not capable of capturing nor storing (to profiles) critical company requirements information, such as the passenger’s employee id, cost center, client matter #, project or cost codes, necessary to earmark these expenses correctly to clients and for accounting purposes. With 75% of the ground transportation spend in the greater NYC area still direct billed or account payment type, this is a critical issue as expenses normally billed back to a client can end up unallocated, costing these companies revenue recapture. This is often lost on the typical end user or passenger.
  • All car charges are via credit card and are generally Point of Sale where pricing is final in the vehicle ; there is no data or rate “scrubbing” to sanctify the rates charged is correct in an industry where billing issues and overcharges occur frequently.
  • For Corporations who are still on a direct billed or account billing process with their corporate suppliers, the redirection of significant ground transportation spend to the T&E system, causes several significant drawbacks.  T&E systems often have limited reporting. By having to manage corporate ground transportation expense in both direct billed and credit card payment methods means loss of consolidated reporting and “split” allocation corporate ground transportation expenses. Also credit card companies do not provide the full pricing detail that is typical in the industry. This is called “level 3 detail”. Credit card companies are typically only able to provide Level two detail, e.g, total ride cost only, to expense management systems.

What is the optimal solution for the corporate ground user?

  • Corporate end users should make sure that any of the mobile booking companies are approved vendors for the company they work for, or else they risk being reprimanded for violating company policy
  • Deploy a mobile corporate car booking system that your corporate ground transportation providers can provide, or,
  • Use a mobile corporate car application like Sedan Magic that can be linked to your existing corporate ground transportation booking system/platform.  This will allow you to leverage:
    • Your existing suppliers to maintain contractual obligations
    • Maintaining your contractual pricing and pre-process scrubbing process
    • Follow your corporate-approved payment and reporting process
    • Captures the critical company requirements data (and validates it)

     

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