Uber Launches Its Most Important Fintech Product: Uber Money; Will Be UPI-Based For India!
Why This Change?
In early days, Payday was an annual event. Now with evolution, it became a monthly business.
The modern days are moving towards a weekly or bi-weekly pay cycle which is normally followed for U.S. workers nowadays.
The same system is followed for half of the workforce in Ubers, mentioned by Peter Hazlehurst, the Uber’s Head of Payments.
The workers earn enough in each pay period to manage their expenses until the next payday.
In case of a sudden cash-crunch, they can either use their savings or a low-cost means of credit.
For the other half, this system does not go so well and the occasional financial requirements creates a fuss which may require an expensive solution like overdraft fees and payday loans.
Uber observed that these occasional situations were affecting its driver fleet services in turn affecting the consumers.
To resolve this issue, Uber has launched Uber Money on 28 Oct.
What Does Uber Has To Say?
Hazlehurst said “[Uber] started with weekly pay, we moved to the next-day payments using ACH, and about 18 months ago we launched instant payments with Visa and Mastercard with a limit of five instant payouts a day,”.
He added, “Those instant payments [after] a year and a half are now 70 percent of driver payouts, so clearly the drivers want to get paid as quickly as they can.”
He said that it’s a good start but will improve in the future.
This launch will bring a new portfolio of financial services to Uber drivers.
It includes real-time earnings deposited after every ride into a fee-free, Uber-branded debit product with unlimited overdraft protection.
What Facility Does It Offer?
Which is intended to bring “additional value for the Uber community” by leveraging the company’s scale to create and assemble products that help drivers get a better handle on their financial situation while giving consumers a more rewarding experience.
How Would It Fix The Flow Of Funds?
With these changes, all payments are automatically deposited to their Uber Debit account after the completion of the job after the payment by customers.
The deposits will automatically sync with the upcoming Uber Wallet. Which they are planning to make available in the next few weeks through the Uber Driver app.
With implementation of this, the Drivers can more easily track their earnings, manage cash back and even pay bills, all from this one-off touchpoint.
Who Will Use These Features?
Hazlehurst said “That feature is particularly important to our drivers,”.
He added “Among the 56 percent of drivers who are eligible for it, we have seen roughly 60 percent who use it, at an average of six or more times a month,”.
Informing more about the subject Hazlehurst said that these offerings are voluntary.
He said that Drivers are not required to use their Uber Debit accounts and can continue to request immediate transfer earnings to any bank account they choose although those transfers will still carry a 50-cent fee.
He added that beyond making payments immediately and automatically at the end of every ride, the Uber Debit card and Uber Wallet are intended to bring even greater benefit to drivers.
What Is The Goal Behind This Implementation?
According to Hazlehurst, the goal is to make every dollar earned via Uber go further.
Giving an example he said, the new Uber Debit card launches with cashback on gas starting at 3 percent for all drivers, and up to 6 percent for the highest tier of Uber Pro drivers.
Moreover, while gas is the first and most obvious cashback benefit for drivers, it is not the only one. Among the Wallet’s purported uses is to serve as a discovery hub for other driver-focused offers.
What Does Future Holds For Us?
“Watch the space for deals, because we want to see how we can leverage our size and scale more broadly for our drivers – gas, insurance, rent, savings. We imagine going out on behalf of our [four million] drivers and securing great deals that they can’t get as individuals,” Hazlehurst said.
Will This System Will Work As A Really Rewarding Hub?
Although, the driver side is getting most of the upgrades, the consumers side will also get some add-ons.
They are planning to launch Uber Wallet in the Uber Driver app first but they will be migrating it to Uber Eats and Uber’s main app in 2020.
Also Uber is planning to relaunch the Uber credit card, which will be offering a 5? cashback to the users in the form of Uber Cash.
This cash can be utilized for rides, Uber Eats and JUMP bikes and scooters, across the platform.
Hazlehurst said “This is really about moving the needle to reward our best and most loyal customers with more Uber services, because we want those who use the service the most to get the best rewards they can,”.