Uber launches financial services division

Ride hailing giant Uber is moving deeper into financial services with the launch of a new division, Uber Money.

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Uber launches financial services division

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The Uber Money team has been charged with delivering new financial products and technologies, including a mobile bank account, digital wallet and upgraded credit and debit cards.

The first product out of the hatch will provide Uber drivers and couriers with real-time access to their earnings after every trip through the Uber Debit account, which will be run in association with Green Dot. 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.

Initially being introduced to drivers in the US, the company plans to export the system globally over the coming months.

In tandem with the new account, Uber will also push out a digital wallet, through which users track their earning and spending history, manage and move their money, and discover new Uber financial products.

The firm is also relaunching the Uber Credit Card, in partnership with Barclays, offering five percent back in Uber Cash from spending across the Uber platform.

The loss-making firm is taking a leaf out of the playbook from competing ride hailing apps in Asia, such as Grab and Gojek, which have successfully developed new revenue streams by branching out into financial services.

In July, Uber joined forces with BBVA in Mexico to bring banking services to customers, using the Spanish bank's Open APIs to allow drivers to access things like real time payments and debit card spending within their app.

The firm says lessons learned from the collaboration with BBVA have been incorporated into its plans.

Uber Money boss Peter Hazlehurst says the launch of the new division is a response to issues faced by drivers and others in the gig economy around access to financial services.

For example, Hazlehurst said what they had found with BBVA in Mexico was that 35 percent of their drivers coming on board had never accessed banking services before.

However, once they started using the app as a banking platform, they then started bringing in money from other places too.

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Comments: (3)

A Finextra member 

In a follow up session at Money2020 where the announcement was made, Uber's Matt Wegner framed the initiative as being motivated as much by extending the service offer to Uber's drivers, as by becoming a revenue stream. 

With competition for drivers fierce, and most drivers needing their cash quickly, the ability to lodge funds into bank accounts immediately a ride is complete, rather than a few days later, will be a competitive advantage in attracting and retaining drivers. 

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

While the ability to deposit funds into drivers' bank accounts as soon as the ride is complete could be a competitive advantage, it would also mean Uber loses the float it used to enjoy by holding on to the money in its own account for a few days (or weeks as Uber drivers in India have recently started complaining). This would tend to push the loss-making Uber further into losses. Hope the company has a plan to prevent that from happening. Wall St seems to be losing patience with loss making tech giants these days.

Bruno Cambounet

Bruno Cambounet Head Of Research at Sopra

Very interesting to see how UBER is expanding its value proposition by leveraging the traditional banking services. I see this step as a strong will to better engage and hopefully satisfy specific players in their Ecosystem, here the "drivers".

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