Incredible JOURNEY

Ground transport remains the most fragmented and challenging sector for travel managers – but that hasn’t gone unnoticed by the big suppliers, says Rob Gill

Ground transport has become one of the most innovative parts of business travel but managing it effectively is still a challenge.

Ask any travel buyer about how they fare and you wil be met with a sigh or a groan followed by some grumbles about how the sector is too “fragmented” or “complex”, as well as being difficult to book using the current crop of corporate tools.

Ground transport used to be something of an afterthought compared with higher spending parts of the travel programme – airfares and hotels – but the increased availability of enhanced data has helped to shine a light on how much money is actually being spent on the likes of trains, taxis and chauffeur-drive transfers.

For all the talk within the corporate travel industry about the “seamless” or “end-toend” business journey, it’s often the bits at either end of a trip that cause the most problems: getting from one's home to the airport and then to the hotel or meeting venue at the other end remains a tricky issue to manage in terms of pricing, visibility of spending and duty-of-care concerns for the traveller.

The bad news for buyers – at least in the short term – is that ground transport is getting even more complicated as various suppliers including car rental firms, ridehailing platforms and traditional taxi firms have changed their business models and are now offering a much more varied portfolio of ground transport products.

Major car rental firms such as Avis, Enterprise, Europcar, Hertz and Sixt have now ventured into areas such as car clubs, car-sharing pools and chauffeur-drive services. Although traditional car rental still remains their core business, expect this kind of shift into a wider range of products to continue.

Car rental firms are also working with supposed competitors such as the ridehailing firms. For example, both Hertz and Avis have partnerships with Lyft in the US where they provide vehicles for some drivers (Hertz also works with Uber).

The taxi and ride-hailing sector is another area seeing a lot of activity with new competitors set to challenge incumbent players such as Uber in London, while the likes of Gett and FREE NOW (formerly Mytaxi), which offer online platforms for the booking of traditional taxis, continue to target the corporate market.

Ground transport itself is almost becoming an outdated term as it’s increasingly being replaced by concepts such as mobility solutions or even Mobility as a Service (Maas), where a technology platform offers an array of different ground options for

Technology is the obvious solution for enabling the successful management of ground transport. But while progress is being made, there is still a long way to go on this”

a journey, ranging from a car or bus to a train, taxi or even an electric bicycle.

Matteo de Renzi, CEO for Western Europe at ride-hailing platform Gett, says: “Managing ground transport for companies has always been a challenge and it’s getting even more challenging. Everyone is mindful about how much their people are spending but the implementation and monitoring of travel policy is still very difficult.”

Making it click

Technology is the obvious solution for enabling the successful management of ground transport. But while progress is being made in creating better corporate booking tools and apps, there is still a long way to go on this particular journey.

“We understand the pain points for corporate clients when it comes to booking and managing ground transportation,” says Andrew Sproston, UK Head of Sales at FREE NOW.

“Travel managers have multiple journeys to take care of, with differing demands and hectic schedules. Increasingly, corporate clients want more control over their travel and expect everything to be on demand and in one place,” he adds.

Finding a single app or platform to meet all these ground transport requirements continues to be the goal of online booking tool providers, travel management companies and also the specialist players in the market, such as Groundscope.

John Mccallion, Groundscope’s CEO, says the organisation's goal is to create a “managed global taxi service” that offers a similar service to online travel agencies, such as Booking.com.

“We are focused on providing a service which removes uncertainty and reduces the general stress of business travel. Our service has been specifically designed to meet the needs of corporate clients,” Mccallion adds. “For the corporation, our service brings this area of spend under control and provides visibility on all spend via our monthly MI (management information) reporting.”

Price movements

While this all sounds great in theory for travel buyers, one of the more immediate questions is what’s likely to be going on with prices for ground transport over the next year or so?

Leading travel management company

CWT is predicting that global car rental prices will rise by 1% next year in its 2020 Global Travel Forecast, although this increase in average prices is forecast to be higher in the UK at 1.8%.

Across Western Europe as a whole, CWT expects rates to go up by 0.5% as the region is affected by sluggish economic growth.

The story is not so positive for UK train fares, which are scheduled to increase by another 2.8% in January 2020, leading to another round of protests about the network’s poor service, high levels of disruption and pricey tickets. A lack of technological advancement and flexibility when it comes to rail ticketing is also a continuing bugbear.

The UK government’s much-criticised franchise system continues to trundle on for now. One of most significant recent moves saw a consortium of Firstgroup and Italian rail operator Trenitalia winning the West Coast rail franchise, which runs services between London, Birmingham, Liverpool, Manchester and Glasgow. It will take over from current operator Virgin Trains in December.

But there could soon be significant changes in the way the rail franchising system operates, as the process is currently being reviewed by a team headed by former British Airways CEO Keith Williams.

Another huge rail project under government review is HS2 (High Speed 2), despite construction on the line already being under way between London and Birmingham. The £56billion project could be cancelled if the ever-growing bill is deemed to be a waste of money – a definitive decision is due from new transport secretary Grant Shapps by the end of this year.

Wherever you chose to look, there’s a lot going on in the world of ground transport – expect fragmentation and complexity to continue in the sector, much to many buyers’ chagrin. The big question is whether technology can bring all of these options together in a single platform to make life easier for buyers. That’s the dream but can it become a reality?

Travel managers have multiple journeys to take care of, with differing demands. Increasingly, corporate clients want more control over their travel and expect everything to be on demand and in one place”