Lyft, Uber see gold in business market.

Uber

San Francisco’s LaneOne provides VIP experiences for concertgoers that include tickets for the best seats in the house, food and beverage, a preferred entrance, and transportation. Once, that might have meant a limo. In 2020, it’s an Uber.

“We load a $50 Uber credit on every ticket we sell,” said Eric Johnson, CEO of LaneOne, which is a joint venture between Live Nation and Azoff MSG Entertainment. (Venues, promoters and artists get a percentage of the sales.) “We set a pin at the drop-off spot at the show. It takes away the anxiety of having to park and figure out those logistics.

“It’s been a seamless partnership for us,” he said. From the get-go, a team at Uber provided “a ton of assistance in the build and integration” to include the ride credits in LaneOne’s app.

The deal exemplifies the types of business relationships that both Uber and Lyft are forging as they seek sources of sustainable, recurring revenue. The money-losing San Francisco ride-hailing companies went public last year and, under the glare of Wall Street scrutiny, need to establish a path toward consistent profits.

While the ride-hail rivals are best known for consumer transportation, each has a division that makes direct deals to ferry customers and employees of companies in a variety of industries, including real estate, hospitality, education, entertainment, sports, insurance and autos.

“Those are huge areas of potential growth for both Uber and Lyft,” said Daniel Morgan, vice president of Synovus Trust Co., a money management firm. “And the fact that these businesses have the confidence to have their employees and customers utilize the services says a lot about how far these companies have come.”

Mark Mahaney, managing director for internet research at RBC Capital Markets in San Francisco, agreed. “These divisions are a bright spot,” he said. “They expand the value proposition of Uber and Lyft.”

Examples are legion: Recruiters pay for job candidates’ trips to interviews; retailers give ride vouchers to shoppers; auto shops offer rides instead of loaner cars while vehicles are repaired or serviced; sports teams comp season ticket holders for game-day rides; and universities replace or supplement shuttle services.

The companies use existing drivers for these trips. Often they generate rides during the slower parts of the day — people are more likely to go to a medical appointment midday than during rush hour or nightlife hours, for instance.

Uber and Lyft help corporate customers integrate the paid-for rides into their apps, and provide tools for dispatchers to arrange rides, and for bean-counters to track expenses.

“For Uber this is a massive market, very differentiated from the core consumer ride offering that most people know,” said Ronnie Gurion, global head of Uber for Business.

Uber for Business generated $1.2 billion in bookings in the fourth quarter, accounting for 8.9% of all ride bookings. (Ride bookings were $13.5 billion; all bookings, including Rides, Eats, Freight, and Jump e-bikes and e-scooters, were $18.1 billion.) Managed business accounts grew 75% compared to the same quarter in 2018, while health transportation grew 300% year over year, Uber said in its quarterly report.

Uber for Business started by aiming at business travelers as Uber integrated its app with SAP’s Concur expense-reporting software. “We quickly saw a host of companies reach out to use Uber in new, innovative ways,” Gurion said. “So we expanded it to play in the (business-to-business) space more broadly.”

He has salespeople on the ground in 20 countries pursuing medium and larger companies. The division operates in all 69 countries where Uber offers rides.

Uber also has a version of its Uber Eats food-delivery service aimed at businesses, allowing them to order group meals for lunch, or dinners while on business trips, for instance.

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