Ride-hailing services Uber and Lyft Inc have managed to secure a huge federal transportation deal from the U.S. General Services Administration. According to the reports, only the deal alone is worth $810 million, although the amount each company will receive is not clear yet.
Through this deal, the U.S. Government will let Uber and Lyft provide transportation to up to 4 million federal employees and their families from now on. Both of the companies obtained the deal from the U.S General Services Administration, which is responsible for the U.S. federal government’s office space, procurement, asset management, and travel management tasks for public officials.
Apparently, Uber, Lyft, and the General Services Administration were in talks for quite a while. A GSA post back from April reveals that the government agency was able to negotiate a 2–4 percent discount with the ride-sharing companies. Uber and Lyft also reportedly agreed to waive technology fees charged to use back-office vendor data and reporting capabilities.
The contract was awarded to Uber for Business, the ride-hailing company’s business-to-business division. Previously, public officials in the United States were able to use the ride-sharing service when traveling on business. And now with this new contract, not only them but also their families will be able to avail the services offered by the companies.
On the other hand, the companies also will be able to formally launch their services within agencies and directly work with officials to promote the service. As a perk of the contract, the U.S. government is also expected to bring other project cooperation opportunities for the two companies.
Ronnie Gurion, global head of Uber for Business, said in a statement,
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. – Ronnie Gurion
Lyft also gave some positive feedback about the contract. According to them, “Lyft already works closely with select agencies, but with this award under our belt, we see an opportunity to be the preferred rideshare partner for many other top federal agencies.”
Charlotte Phelan, the Federal Acquisition Service Assistant Commissioner for Travel, Transportation and Logistics thinks that their contract with Uber and Lyft “modernizes official travel and will make it easier, and cheaper, to use rideshare services for official travel”.