The rideshare and taxi service Uber has been ruffling a lot of corporate travel managers this year as it unabashedly and very publicly sets its sights on business travellers.
But its spectacular success has experienced a few bumps this week as it has been banned in Spain and parts of India during the past few days.
Is this the end of the road for the sharing economy's incursions into corporate space?
Business Travel iQ Insight
Uber has seen a stop sign in Spain and India for different reasons but the root cause is the same, namely the lack of conforming to local licensing requirements which traditional ground transport providers must do.
After a passenger was allegedly raped by an Uber driver there, Delhi banned it and other web-based taxi firms. The Indian Home Ministry is now urging all states to do the same with all web-based firms not registered or licensed by a government authority.
In Spain a judge banned Uber after a protest by taxi drivers on the basis that its drivers didn't have official authorisation and the service was unfair competition.
Uber does not own cars or employ drivers but is effectively only a distributor, linking those who need a ride who those that can provide it.
The sharing economy provides one of the conundrums of our times. On the one hand, it puts those who have in touch with those who need and so offers the market competition and lower prices. Of course, as with all things that are "too good to be true", there are some potential serious drawbacks both with its perceived virtue and the ramifications for users.
First of all, many sharing schemes only exist because there is a powerful distributor providing the technology or security which enables the low entry cost, low cost business it facilitates to flourish.
But distribution isn't always cheap. At the moment Uber is understood to be spending massively on marketing, PR and incentives to attract more drivers. The cost of recruitment and expansion may be exceeding the incremental revenue but at the size Uber now is, it needs to become market dominant in order to survive.
As with most businesses its biggest challenge is to match the supply of drivers to the demand.
But the case in India highlights a serious potential pitfall for sharing sites and corporate travel and that is responsibility and liability. Although vetting in itself does not guarantee future behaviour, the Indian case emphasises the consequences of using cars and drivers which have not been subject to checks in a way that can demonstrate that steps have been taken to minimise traveller — and corporate! — risk.
In these days of duty of care, every business needs to be able to prove that it did all it could do to protect the health and safety of its employees and that includes using registered, licensed, insured vehicles and drivers.
Using cars and drivers that are not subject to the same checks as licensed taxis may not qualify.