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Here’s Why Business Travelers Are Ditching Taxis

By:
Martha C. White
4 min read
Uber and Lyft cars drop off passengers at the Bradley terminal at LAX, October 20, 2015. - Robert Gauthier—LA Times via Getty Images
Uber and Lyft cars drop off passengers at the Bradley terminal at LAX, October 20, 2015. Robert Gauthier—LA Times via Getty Images

Taxi stands and rental-car counters are frequent destinations for business travelers, but road warriors are increasingly avoiding yellow cabs and rentals in favor of ride-hailing services like Uber and Lyft.

A new study by Certify, an expense-management platform, finds that the sharing economy had a major breakthrough last quarter: Uber and Lyft are officially now more popular than conventional taxis and rental cars. A combined 52% of ground transportation receipts processed by Certify in the third quarter of 2016 were for these two ride-hailing service. (Uber comprised the lion’s share, making up 48% of receipts, while Lyft generated 4%.) Taxis fell from 14% in the previous quarter to 12%, and car rentals slipped from 37% to 36% of receipts.

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Even as recently as a year ago, the landscape was very different: Rental cars were the largest single category, responsible for 44% of receipts, followed by ride-hailing/sharing at 24%, with taxis bringing up the rear at 22%.

When taxis and ride-hailing services are compared head-to-head (not including rental cars), it’s clear that Uber and Lyft have taken a big bite out of taxis’ business. As recently as the first quarter of 2014, Lyft’s market share was barely a trace on Certify, and Uber made up just 18% of all receipts, with taxis taking the remaining 82%. Compare that to now: Uber now commands 75% of the market, with Lyft taking 6% and taxis’ share of the market shrinking to less than 20%.

Uber has drawn complaints for surge pricing that can bring the cost of a ride home on busy nights like New Year’s Eve up to an eye-popping $300 or $400, but higher prices don’t seem to be a factor in the traffic that ride-hailing apps are seeing from business travelers. Certify’s data finds that the average Uber ride costs $22.91, compared with the average taxi fare of $35.91. Lyft is even more of a bargain, with an average fare of $21.80. Some of the discrepancy may come from the variety of service tiers Uber and Lyft offer: If you don’t feel like springing for the high-end options (Black and Premier, respectively), you can elect a small car to save a few bucks, or share a ride with strangers and save even more.

Read next: Uber Reveals How Much Its Drivers Really Earn—Sort Of

Uber also cut prices in 100 cities at the beginning of this year in a bid to goose ridership after the free-spending holiday season was over, the third year in a row it has run these kinds of promotions.

Certify dug further into the numbers and found that there are distinct regional preferences. Tech-friendly San Francisco is the top city for both Uber and Lyft, accounting for about 11% and 15%, respectively, of receipts for those services. New Yorkers (or business travelers visiting the Big Apple) are still loyal to their yellow cabs, though: Nearly 20% of taxi receipts come out of New York City.

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