The US government awarded a big transportation contract to Uber and Lyft this week, authorizing the ride-hailing companies to provide transportation to up to 4 million federal employees and their families.
The General Services Administration, the procurement arm for the federal government, granted the five-year contract to Uber and Lyft, the companies confirmed. The contract is worth up to $810 million, though it’s unclear how much each company will receive.
While individual federal employees have previously been able to use ride-hail services for travel, the new contract allows the companies to formally launch their services within agencies and directly work with officials to promote the service.
The contract was awarded to Uber for Business, the ride-hailing company’s business-to-business division. “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, global head of Uber for Business, said in a statement.
Lyft also hailed the contract as a good sign for the growth of its business. “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,” a spokesperson said.
A spokesperson for GSA did not immediately respond to a request for comment, but in a blog post back in April, the agency said it was able to negotiate a 2–4 percent discount with the companies, compared with large commercial customers. Uber and Lyft also agreed to waive technology fees charged to use back-office vendor data and reporting capabilities, the agency said.
The contract with Uber and Lyft “modernizes official travel and will make it easier, and cheaper, to use rideshare services for official travel,” Federal Acquisition Service Assistant Commissioner for Travel, Transportation and Logistics Charlotte Phelan wrote. “No new apps to download – and no paper receipts to lose.”
*By Andrew J. Hawkins, The Verge*