The king of the ride-hailing industry is making a major move into financial services.
Uber has announced that it will launch Uber Money, a payment platform that will allow drivers to get paid immediately while avoiding credit card fees.
Under terms of the program, the multinational giant will give each of its 4 million drivers access to mobile bank accounts. The accounts will let drivers get paid directly and immediately after each ride.
The system will rely upon an Uber-branded debit card with an Instant Pay service. The card has already been tested in the US, as well as several other markets, earning positive feedback.
Peter Hazlehurst, head of the Uber Money project, says that more than 70% of driver payments were made using the Instant Pay option during testing. The option lets drivers access their earnings immediately through a no-fee bank account.
In the US, Uber Money banking services are provided by Green Dot. The accounts don’t have maintenance fees, so Uber drivers keep more of what they earn.
The accounts also feature a distinctively driver-friendly option: no-penalty overdrafts of up to $100. The company explains that this feature is intended to allow drivers to gas up in the morning before they start work.
Uber says its long-term goal is to replace paper transactions with digital funds transfers worldwide, especially in countries like Pakistan and Bangladesh where cash reigns supreme. Uber says 40% of all trips globally are paid with paper currency, and the company doesn’t hide its ambition to scale that figure down.
Amid an expansion of ride-hailing companies across the globe, Uber Money is expected to strengthen brand loyalty among customers and drivers alike. The scale of Uber’s worldwide operations gives the company an advantage in negotiating terms with vendors, reducing fees, and providing affordable services.
Uber Money will help people around the world gain access to services they were excluded from before, Hazlehurst says. For example, future Uber Money products could eliminate the financial middleman between the company and its 100 million customers, who currently use credit cards to pay for rides and food orders. Hazlehurst hinted that the company might one day provide customer accounts as well, as countries like India are home to millions of unbanked potential customers.