Rounding Out Open Booking Travel Risk Management by Understanding Sharing Economies

Parts 1 and 2 of this three part blog series discussed the financial, regulatory, and legal risks that result from unchecked open booking in corporate travel. This final entry will examine the relatively recent phenomenon known as sharing economies and how the concept figures into open booking and the travel risk management dialogue. The term "sharing economy" refers simply to peer-to-peer sharing of goods and services with a nominal twist.Sharing economies are typically recognized for their use of specialty online or mobile applications which assist in connecting users to providers.Unlike traditional peer-to-peer retail options such as ebay or etsy, sharing economies exist for the purpose of providing short term lease and labor options.If you need a place to stow man's best friend while away for the weekend try DogVacay.Need the hot new handbag for a night on the town?Try renting it from ArmGem, Rent the Runway, or Bag Borrow or Steal.In the same vein, adventurous travelers can connect to nontraditional travel mechanisms and accommodations using sharing economy applications such as Lyft, Uber, and airbnb.Car services like Lyft and Uber offer travelers new ways to hitch a ride to the airport or maneuver about an unfamiliar city. Airbnb allows homeowners to rent out rooms to weary travelers.  

Sharing Economy Features

So, why would travelers bypass traditional travel choices to use these services?First, sharing economies sometimes fill gaps in the availability of goods or services.Try renting a hotel room near Augusta, GA, for instance, the week of The Masters golf tournament or finding last minute accommodations for an Olympic event or the World Cup.  Second, these services can provide personalized experiences that give travelers a taste of the local flair. The most complete services propagate corporate rules regulating product maintenance and cleanliness as well as the friendliness of service providers.These rules, paired with social rating systems, detailed descriptions, and photo galleries, assist travelers in selecting a unique travel experience while ensuring a certain level of comfort and convenience.Finally, the use of mobile applications to interact with service providers can offer convenience for busy individuals.  Certain applications allow consumers to post their need for a specific task or service and entertain bids transferring the workload to the provider.In addition, applications frequently allow consumers to pay for goods and services directly from smart devices offering a certain advantage over cash only services.  

Market Penetration

Just how popular are sharing economies in travel?Their use has exploded.Popular applications now boast millions of users, hundreds of millions of dollars in corporate revenue, and business valuations reaching into the billions.For corporate travel departments, that level of magnitude means that your users are likely already using sharing economies or are aware of and considering their use.As an example, I recently attended a legal industry conference in which one corporate sponsor offered to provide Uber payment coupons for transportation to an after-hour's event.The point is simply that this travel method is ubiquitous and cannot be ignored.  

Travel Management Risk

So, why do sharing economies matter to corporate travel departments?These options can carry their own risks.Perhaps the most cited are: 1) a lack of regulation leading to service inconsistencies and 2) the potential for underinsured or uninsured providers.Either scenario could leave few remedial options for aggrieved or injured consumers.Travel departments should be concerned that business travelers could look to the corporation to make whole any ailment not covered by service providers.    Beyond specific identifiable risks, if there was one key take away from the first two blog posts in this series, it was that visibility into employee travel is paramount.Travel managers cannot quantify risk without a complete picture and sharing economies can create additional opportunity for corporate travelers to buck established systems.  

Conclusion

Corporate travel departments must understand that travel risk is a complex intersection of law, regulation, accounting, and human factors.Higher demand for travel flexibility and the availability of travel technology such as traditional open booking platforms and newer sharing economy applications challenge corporate visibility into travel habits and expense.In order to regain control, travel departments should make every effort to identify employees already using or likely to use traditional open booking and sharing economy applications.Those users can then be educated as to the risks involved as well as specific corporate travel policies that might apply.

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