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April 21, 2016 | Uber Surpasses Rental Cars for Business Travelers; You Ain’t Seen Nothing Yet

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Since 1st quarter of 2014, Uber’s percentage of ground transportation business booked on Certify, the second-largest provider of expense software in North America, has soared from under 10% to 43%.

Taxi usage plunged from over 35% to a mere 14%

Rental car usages dropped from 55% to about 40%, making Uber the leader for business travelers.

Bloomberg reports Uber Overtakes Rental Cars Among Business Travelers

Taxis aren’t the only ones that may be stressing out about Uber Technologies Inc. Transactions from the ride-hailing startup have surpassed rental cars among American professionals, according to Certify, the second-largest provider of travel and expense management software in North America.

Uber accounted for 43 percent of ground transportation transactions expensed through Certify last quarter, while rental cars had 40 percent. Ride-hailing services, with Uber at the forefront, overtook rental cars for the first time in the fourth quarter of 2015 and have since widened their lead, according to a study by Certify published on Thursday.

While an Uber or Lyft Inc. fare costs much less than the average rental car booking, the data show the changing preferences among business travelers. Rental car transactions have fallen 15 percentage points in two years. The decline isn’t quite as steep as the one experienced by taxis, which fell 23 percentage points over the same period. Taxis accounted for 14 percent of ground transportation transactions in the first quarter of 2016.

“It really comes down to convenience,” said Robert Neveu, president of Certify. “The ability to hail and pay efficiently—that convenience factor is huge, and we’re seeing it change the habits and behaviors of our users.”

Some automakers, which have traditionally viewed rental cars as a way to expose their vehicles to prospective customers, are getting into the ride-hailing game. General Motors Co. said in January it would invest $500 million in Lyft, the second-biggest U.S. car-booking company. As part of their partnership, GM and Lyft are developing short-term car-rental hubs in some U.S. cities. Mercedes-Benz parent company Daimler AG bought Mytaxi, an Uber rival in Europe, in 2014.

Rent or Ride?

rent or ride

You Ain’t Seen Nothing Yet

Pretty soon those Uber cars and taxis will be driverless.

Yes, I have a musical tribute.

Mike “Mish” Shedlock

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April 21st, 2016

Posted In: Mish Talk

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