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Uber has yet to make a real dent in the market for business travelers

Sally Herships Apr 22, 2016
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Uber is continuing to disrupt the automotive world, but not in all markets. Oli Scarff/Getty Images

Uber has yet to make a real dent in the market for business travelers

Sally Herships Apr 22, 2016
Uber is continuing to disrupt the automotive world, but not in all markets. Oli Scarff/Getty Images
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COPY

If you’re traveling for work, Uber might not be your first option. Business travelers who rent cars often do so because they need to cover a lot of ground, said Christopher Agnew, managing director with MKM Partners, an equity research, sales and trading firm. 

According to a new study, Uber is continuing to disrupt the automotive world. The new release, from Certify.com, which does expense reports for companies, said business travelers are increasingly choosing Uber instead of a traditional rental car. But lift up the hood on the data and you may be surprised.

“The average car rental transaction is over 110 miles per day, and usually, multiple days,” said Agnew. But Uber tends to attract a totally different kind of passenger.

“Around 5 percent of their transactions are 30 miles or less,” he said. “Anything over and Uber is much more expensive.”

Which is why, said Agnew, Uber has yet to make a real dent in the business rental market.  

When it comes to examining data on business travel, he noted, Uber is apples to traditional car rental companies, like Hertz and Avis’ oranges. Think coffee or tea. Or perhaps soy and dairy are more apt. Bottom line, said Agnew, the two are simply not the same — they’re parallel lines that will not meet. 

“Someone’s in a city, and they’re taking eight or nine different, short distance trips between meetings — [that] doesn’t mean that person was ever considering a car rental transaction,” Agnew said.

John Healy is managing director with Northcoast Research, an equity research firm. Often, he said, when travelers like him are on the road for work, their priority is getting to and from meetings. And that need trumps waiting for a car service or an Uber driver.  So he does what he says many business travelers continue to do. 

“I rent a car,” he said. 

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