Mitigating Risks in the Sharing Economy

The sharing of transportation and accommodation services facilitated through companies such as Lyft, Uber and Airbnb, has massively transformed leisure travel. Peer-to-peer services use technology to match travelers with service providers, offering greater flexibility, ease of use and often increased value for money. Now that the shared economy services have reached a wide level of acceptance, the industry leaders are turning their attention to business travelers.

By 2014, nearly 10 percent of shared accommodation customers traveled for business, and travelers and travel managers were asking for a dedicated shared accommodation business travel product. As a result, the shared services turned business travel into a key strategic initiative. Since shared accommodation services operate in a less regulatory environment, a major issue facing them is whether travel managers can trust them to provide an acceptable level of safety and security to their business travelers.

In the past, some unpleasant stories have raised safety concerns about using shared accommodation services. At the same time travel managers struggled with even the most basic duty of care issues. How could they keep track of their travelers? How could a company control shared accommodation services use and spend? Will their travelers be safe anywhere using shared accommodation services? One of the major shared accommodation players has taken steps to increase their compatibility with business travelers, focusing on data transfer and transparency, safety and comfort. This may allow them to evolve into a major disruptor within the business travel economy.

Shared accommodation services have updated their sites with special listings targeting the business traveler and tailored to their needs. There has to be a minimum of positive reviews as it relates to overall cleanliness and accuracy of the description, hosts have to respond to inquiries within 24 hours, guests are able to check in 24 hours a day, the listing must be for the entire space (as opposed to a shared room or apartment) and it must be a non-smoking environment. These business friendly listings must also offer Wi-Fi and essentials such as shampoo, smoke and carbon monoxide detectors, a hairdryer, an iron and desk space. Some shared accommodation services also provide insurance to the traveler. For travel managers, one shared accommodation provider developed a dashboard, which allows data syncing with ISOS, iJet and UHC, and permits companies to keep track of its travelers in real time and give visibility and control over their travelers’ activity.

Shared economy service providers are now providing dedicated business travel solutions and integrating capabilities with business applications like expense tools and traveler tracking. According to the GBTA Business Traveler Sentiment Index^TM Global Report – January 2017, in partnership with American Express, company travel policies have been slower to allow home-sharing services than ride-sharing services, with only 30 percent of business travelers saying home-sharing options are allowed by their employer’s policies. Using shared accommodation services for business travel creates a certain amount of new risk for corporations that needs to be addressed. Before enabling travelers to use shared accommodation services for business travel, companies need to evaluate their business reasons as it relates to existing policies and procedures.

Research shows that a majority of organizations do not have a clear policy around shared accommodation services for business travel. The advantages of cost savings and more convenience of shared accommodation providers needs to be weighed against business hotels with higher security standards typically operated by well-known global hospitality providers. From a legal and duty of care perspective, to know whether the shared accommodation service that is being used is legal in the actual country and even jurisdiction where the traveler will be, the service provided is comparable to a hotel in that country and does the local risk allow for the use of shared accommodation services.

When selecting appropriate accommodations, the local conditions and overall itinerary of the traveler should always be kept in mind. The one-size-fits-all approach is not recommended, as shared accommodation services can range in safety depending on location. Specific locations and their local risk as well as age, gender, health, sexual preference, ethnicity and religion should all be taken into consideration. Furthermore, the risk associated with what kind of work is involved, how long travelers are staying and why, may differ per itinerary and traveler and should all be taken into account.

The shared economy services are here to stay and will likely evolve step by step into a major business travel disruptor. How companies decide to integrate these services into their corporate travel program requires careful assessment and consideration by travel managers, security experts and the actual business traveler.