It has become a trend where almost every major tech company today is trying to offer a 360-degree range of services. Facebook is creating its own cryptocurrency, Google is investing in autonomous driving tech, Apple has released its own credit card, and Amazon has branched out to personal assistants and AI-development. It is a relentless race towards ubiquity that these megacorporations seem to have identified as critical for their survival in the future.
A veteran runner in this race is none other than Uber, who this week announced that it will be offering financial services to consumers through a service called Uber Money. The company had already begun making a push into finance and banking when it launched is own Debit card last year in partnership with Green Dot and with Uber Pay previously. Now, it’s going all-out with its financial services.
What features can drivers expect?
According to Uber, their new service will offer the following:
Real-Time Earnings: Instead of waiting for weekly payments or cashing out through Instant Pay, drivers and couriers will have real-time access to their earnings after every trip through the Uber Debit account.
Uber Debit Account & Uber Debit Card: For drivers in the US, and expanding to more countries soon after, we are updating the no-monthly-fee Uber Debit Account, powered by Green Dot, to integrate seamlessly into the Uber Driver app. The refreshed Uber Debit Card will launch with cash back on gas starting at 3% and up to 6% for the highest tier of Uber Pro drivers.
Uber Wallet: With Uber Wallet, earners and spenders will now be able to easily track their earning and spending history, manage and move their money, and discover new Uber financial products all in one place. The Uber Wallet will start rolling out in the Uber Driver app in the coming weeks, and will soon start rolling out in the Uber and Uber Eats apps as well.
Uber Credit Card: The ride-hailing firm is relaunching the Uber Credit Card, in partnership with Barclays. Card members will now receive 5% back in Uber Cash from spending across the Uber platform, including Uber Rides, Uber Eats, and JUMP bikes and scooters. You’ll even get rewarded for hailing an Uber Copter from Manhattan to JFK.
A path to profitability?
Part financial services, part customer loyalty scheme, Uber is pushing in a new and interesting direction. For a company that just can’t get its hands on profitability, it’s been trying its best to try and cover its loss-making ride-hailing service with other offerings such as this and Uber Eats.
“Uber operates in the ride hailing, personal mobility, food delivery, freight and driverless vehicles markets and is yet to exhibit a clear path to profitability in any of them—and all of those sectors face stiff competition,” Robert R. Johnson, professor of finance at Creighton University’s Heider College of Business, told Observer. “The firm has proven it can grow revenues, but has also proven adept at growing costs.”
“They need to unify their payment options, systems and terminology,” Holly Glowaty, co-founder of branded currency conference Flourish, also told Oberver . “They have the capability to do so, and now they are focusing on it. I do think it is a massive opportunity they are finally acknowledging with the formation of Uber Money.”
Some, however, proved more optimistic. As reported by Quartz, Victor Orlovski, managing partner at Fort Ross Ventures, thinks Uber is well positioned to become a kind of business bank for its gig workers, and says services like financing and remittances could be promising business lines. “It’s not a secret that many drivers, here in the US for example, are immigrants and they have relatives abroad,’ said Orlovski, whose firm is an Uber investor. “They can become a great source of remittance payments.”
According to Peter Hazlehurst, who will head Uber Money, and as reported by CNBC, the emphasis at first will be expanding Uber’s efforts to give its 4 million-plus drivers and couriers around the world access to a mobile bank account so they can get paid after each ride, Hazelhurst also said that Uber could one day offer a bank account to consumers on its platform
Following the announcement, Uber stock hasn’t made much movement though – investors don’t seem to be biting. The financial services field is already very crowded, and as Orlovski says, Uber Money will need a “killer feature” to set itself apart from the competition. Regionally, Careem, as part of Careem Pay, already offers similar financial services. These could be integrated into Uber’s infrastructure when their acquisition of Careem is complete next year, and the two companies stand to learn from each others’ data.