Business & Economy

Study: Uber and Lyft edging out taxi services for LA business travelers

In this photo illustration, the new smart phone app 'Uber' logo is displayed on a mobile phone next to a taxi on July 1, 2014.
In this photo illustration, the new smart phone app 'Uber' logo is displayed on a mobile phone next to a taxi on July 1, 2014.
David Ramos/Getty Images

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More people traveling to Los Angeles on business are choosing the App-based ride-sharing services Uber and Lyft instead of taxicabs and rental cars, according to a study released on Thursday. 

Business expense software maker Certify has been tracking the rise of the ride-hailing services in the U.S. since the beginning of 2014. The company processes reimbursement receipts for 1.5 million businesses worldwide. For its quarterly reports, it analyzed about 8 million corporate receipts and expense transactions.

These reports shed new light on the types of ground transportation that are used by business travelers. 

In early 2014, Uber and Lyft rides made up just 13 percent of ground transportation expenses in L.A. Rental cars made up 45 percent, and taxis 42 percent. Since then, the numbers have made a huge shift.  Uber and Lyft rides now represent 41 percent of ground transportation, topping both rental cars (31 percent) and taxis (28 percent). 

* Data based on customer travel expense receipts from expense management software company Certify.

“It’s been incredible to watch the transformation of the ground transportation category unfolding quarter by quarter,” said Robert Neveu, CEO of Certify.

One factor in the growth, he says, is that more large corporations are allowing their employees to use the App-based services. Previously, most would only approve reimbursements for cabs and rental cars. That is changing.

"Uber is becoming more prevalent in the large corporate markets where the Fortune 500 companies all of a sudden have an Uber added to their list of approved vendors," Neveu told KPCC.  But he added that there are still some large corporations holding out. 

None of this comes as a surprise to Andrey Minosyan, CEO of the Los Angeles Independent Taxi Owners Association.  He says since Uber and Lyft came on the scene, overall taxi business has fallen off by 40 percent. 

Taxi companies have long complained that the App-based services have an unfair advantage because they operate under far fewer regulations and have lower insurance and background-check requirements. Minosyan says that taxi companies have tried to compete by launching Apps of their own and upgrading other technology, but even the upgrades require approval from the city. 

"Today, we cannot just go and purchase any software we'd like to," Minosyan told KPCC. "There's certain requirements that we have to follow."