Month: January 2020

Many Global Mobility Solutions clients have transferees who are comfortable with the sharing economy. As a result, these transferees may have different expectations for the services they use during their relocation. The impact of the sharing economy on the relocation industry may initially seem to be wholly transformative. However, the industry’s response should be focused on ensuring best practices are recommended to clients.

What is the Sharing Economy?

The sharing economy is an outgrowth of broad online connectivity. Individuals can directly purchase, offer, or share access to a variety of goods and services. These goods and services are acquired, offered, or shared directly with other individuals. Often an online platform facilitates these economic transactions, and there is no third-party interaction.

As a result, businesses, firms, and incorporated entities are bypassed. In some cases, sharing economy transactions encroach on established business models. By adopting a peer-to-peer (P2P) business model, individuals also bypass existing regulations. Also, some of the established business models require licensing and other government oversight activities that arose as part of consumer protection initiatives. P2P business models may not offer the same level of consumer protection.

Relocation Program Goals

A company’s relocation program may focus on a variety of specific topics and corporate goals to ensure the best possible results. These topics may include:

• Centralization
• Cost Saving Initiatives
• Employee Retention
• Employee Satisfaction
• Market Competitiveness
• Outsourcing Initiatives
• Revenue Stream Development
• Talent Acquisition
• Technology Utilization

Is the Sharing Economy Part of the Relocation Industry?

Certain aspects of the sharing economy might be thought of as an integral part of the relocation industry. For example, housing for transferees may include some form of rental agreement. With the sharing economy, new ways to rent space might be under consideration.

GMS spoke with Mandy Tancak, Senior Global Account Manager at GO Destination Services who agreed to share her knowledge and expertise on this topic.

How Does the Sharing Economy Impact the Relocation Industry?

According to Mandy Tancak, the rise of companies and platforms such as Uber, Lyft, ZipCar, and AirBnB has led to a change in the view of traditional industries such as ground transportation and temporary accommodations. Although Millennials were early adopters of the sharing economy, Gen Z is poised to push it further into the marketplace. Also, many other generational cohorts such as Baby Boomers are beginning to embrace the flexibility, ease, and level of service that these new companies and platforms provide. As a result, transferees’ acceptance of the sharing economy is directly impacting the relocation industry.

Example: Pre-Assignment Trips

Traditional Model

On pre-assignment trips, transferees would take a town car or taxi from the airport to a hotel where they would stay for a few nights. Both the town car provider and hotel would have had corporate accounts with the employer or Relocation Management Company (RMC). Corporate discounts may have been applicable, and costs would have been billed directly to the employer.

Sharing Economy Model

In the sharing economy, transferees may book and pay directly for a ride from the airport through Uber. The quality of the vehicle is at least comparable and in some cases superior to the taxi that would traditionally have been used. Uber’s introduction of greater in-app security features may help this option be seen as more secure than a taxi.

Rather than staying at a hotel, transferees on pre-assignment trips may book an apartment in the city through AirBnB. They may feel this provides a more authentic experience, and may also offer the opportunity for them to stay in and get a better feel for an area that they are actually considering for a long term rental, as well as the type of apartment that they may eventually end up leasing.

Example: Temporary Housing

Traditional Model

Traditional temporary housing through an RMC receives evaluations on several criteria and must meet specific cleanliness and quality standards. There are full move-in inspections to verify the state of the unit. Providers must undergo background checks and building security arrangements are assessed. Maintenance and emergencies are handled through a specifically defined process, and major equipment is serviced by professionals on a regular schedule. The transferee’s experience is of the utmost importance in order to ensure greater employee satisfaction and promote talent retention.

Sharing Economy Model

AirBnB offers solutions for temporary housing that traditionally would have been provided by a hotel or corporate housing provider. An AirBnB apartment can offer a more comfortable option than a hotel, and expands the options available to those otherwise considering corporate housing.

Some transferees looking for accommodations in higher rent markets might be willing to consider house sharing options. There are more options available to explore such as SpareRoom or Craigslist. Relocation providers may however feel less comfortable recommending specific house shares due to not having knowledge of, nor being able to provide assurance of future housemates.

Sharing Economy Risks

Transportation Risks

Uber’s surge pricing during inclement weather, or other high demand periods, can cause costs to exceed traditional transportation providers. Some Uber passengers have reported receiving fines of up to $150 for a mandatory “cleaning fee.” These fines are reportedly due to Uber drivers falsely claiming the passengers vomited inside their vehicles, in a scam called “vomit fraud.”

Housing Risks

Renting an AirBnB does come with added risks. Quality cannot be assured, and there is not always someone on hand when one arrives to check in, or when assistance is required, as there would be in a hotel or traditional temporary housing. Security considerations can also be a problem. Not knowing who the host is, nor having around the clock presence at the entrance are factors employers need to take into consideration when determining whether transferees should be allowed to utilize the services of sharing economy companies and platforms.

When the total cost of an AirBnB stay is taken into consideration, including cleaning and service fees, these costs can often be more expensive than a traditional hotel for shorter stays. For shared accommodation requests, RMCs may not be comfortable recommending specific house shares. RMCs may not have direct knowledge of the house share, nor can they provide assurance of future roommates.

What Should Employers do About the Sharing Economy?

Employers should be aware of the potential for increased costs and other concerns when approving transferees’ use of sharing economy companies and platforms. When it comes to securing longer term rental accommodations, transferees typically prefer traditional housing providers. While commission-free and rental by owner sites do exist, working with a Realtor^® through the Multiple Listing Service (MLS) is still often viewed as the preferred solution.

Conclusion

GMS’ team of corporate relocation experts has helped thousands of our clients understand how to leverage industry best practices when it comes to the sharing economy. Our team can help your company design a relocation program that allows for ease of use and flexibility, while delivering the best experience for transferees to ensure employee satisfaction and retention.

GMS was the first relocation company to register as a .com. The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation^® technology platform.

Global Mobility Solutions is proud to be named and ranked #1 Overall, and #1 in Quality of Service by HRO Today’s 2019 Baker’s Dozen Customer Satisfaction Survey.

Contact our experts online to learn how to leverage the best aspects of sharing economy companies and platforms for your company’s relocation program, or give us a call at 800.617.1904 or 480.922.0700 today.