The U.S. General Services Administration today issued Uber Technologies Inc. and Lyft Inc. a multimillion-dollar deal to provide transportation services for government workers.
The contract was reported today by Reuters. It’s said to be worth up to $810 million over five years, but there’s no further detail on how the sum will be split between Uber and Lyft.
“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,” said Ronnie Gurion, the executive leading Uber’s Uber for Business unit, which manages deals with large customers.
Uber for Business and Lyft’s equivalent offerings offer organizations features not included in the standard version of their apps to help with tasks such as employee expense reimbursement. The companies also provide cloud-based dashboards for managing business trips booked through their platforms. Though primarily aimed at the enterprise market, these capabilities have evidently helped put Uber and Lyft in a stronger position to compete for public sector deals.
Under the federal contract announced today, Uber and Lyft can offer their ride-hailing apps to more than four million employees and contractors at U.S. government agencies. The General Services Administration reportedly secured discounts of 2% to 4% from the two companies and negotiated terms that waive certain fees entirely.
The deal is a notable win for the companies not only because of its size but because the vote of confidence from the General Services Administration may make it easier to convince other public sector organizations to adopt their services. Uber in particular is actively targeting the public sector market. The company this year revealed that it has started offering trip booking software to transit agencies and, shortly thereafter, acquired a firm called Routematch Software Inc. to add more products to its public transportation portfolio.
The extra customer validation from the General Services Administration deal might also put Uber and Lyft in a better position to compete for enterprise customers. The companies’ ride-hailing businesses have taken a significant hit in recent months from lower demand, but Uber’s latest earnings report revealed that interest is slowly picking up again.