Vehicle sharing platforms Uber Technologies and Lyft Inc. have recently scored a United States federal transportation contract worth USD 810 million for a period of five years.
What does this contract mean?
Federal services of the United States are managed by The General Services Administration (GSA) and on Monday i.e. 23rd November 2020, the GSA awarded ride-sharing companies- Uber and Lyft with a five-year federal transportation contract. While federal agents used the services before, as individual personnel or common men for meeting their travel needs, the said contract will allow these companies to introduce their respective services from within the federal agencies, a formal launch by which they will be able to work with officials in order to promote and use their service.
On this matter, Uber mentioned in a statement that receiving this contractual award from the federal government is an opportunity and that it was a part of their “Uber for Business” program. Under this program, Uber aims to work with large companies and organisations, partnering with them by offering their services with additional benefits and offers.
Furthermore, Veronica Juarez, Vice President of Social Enterprise and Govt. mentioned in a statement that the United States government spends approximately USD 200 million on four-wheeler transportation every year and that this contractual award had a capping of around 4-year negotiation process, as stated on Reuters.
It has come to light that both these companies, Uber and Lyft will offer 2%-4% discount on their services to the federal agencies under this contract as compared to regular customer fares. Also, the companies will not be charging any technology fees that they usually charge to access vendor data and reporting capabilities.
Ronnie Gurion, Global Head of Uber for Business stated, “The expansion of our customer base to include government is a natural next step for us, and we’re proud to help federal agencies tackle some of the biggest administrative challenges they face,” according to a report by the Verge.
Lyft spokesperson mentioned in an interview that the company already works closely with select organisations and agencies, but with this federal contract, it will have an opportunity to grow and expand its business to become the preferred rideshare option for other governmental agencies as well.
This five-year contract will make travel easier and convenient for federal agents and employees. It will be a much cheaper and efficient way for them to travel for official purposes, especially considering the health safety measures which is the need of the hour due to the COVID-19 pandemic.