Uber has announced its latest update: Uber Money. At the Money 20/20 conference Peter Hazlehurst, Head of Uber Money introduced the updates to the public. The new features aim to  improve the experience of drivers by adding the following services:

1. Real-time earning: From now on Uber drivers across America and later through the rest of the world will be able to access their earnings immediately after the ride is finished instead of waiting for the weekly payments or having to cash out through Instant Pay.

2. Mobile Wallet: This feature allows the earners to track and move their money in one place. They will have access to new financial products from Uber. This feature will first be available on the Uber Driver app and then will expand to the Uber Eats app as well.

3. Uber Debit Account and Debit Card: The company will be integrating its Uber debit account, provided by Green Dot, financial technology and bank holding company headquartered in Pasadena, California into the Driver app. The feature provides 3% cash-back on gas, 6% for “Diamond” tier drivers.

4. Uber Credit Card: This is a relaunch of a branded credit card that was first introduced two years ago. The Uber Credit card will give cardholders 5% cash-back for spending across the Uber Platform( Uber Eats, Uber Rides, JUMP bikes and scooters)

What does Uber Money want to achieve?

This launch is centered around gig work. Gig workers have unique needs when it comes to banking. People who rely on gig work for a substantial amount of their income have difficulties with traditional banking and credit. The inconsistent and unpredictable income patterns paired with unmet credit needs, plus health insurance needs and tax requirements make for a challenging situation.

Considering that 40% of the American workforce makes around 40% of their income through gig work, while more than half of them maintaining regular jobs its easy to see why Uber would branch out in an attempt to meet the needs of their employees.

This opportunity while meant for the small group of people is set to greatly improve the quality of their financial lives. Uber Money will help its employees, most of which are 30-49, while a third of them are African-American or of Hispanic heritage, to navigate their unpredictable income and get credit card benefits that they would surely have trouble getting from the banks.t

As Hazlehurst said, 60% of Uber drivers go negative on their accounts six times a month. But with the new Debit account feature, if the drivers make enough trips, overdraft fees will be waived. In addition to that, the new Fintech strategy also takes into account that some Uber drivers send up to 25% of their income back to their home countries. The Uber Money will make it easier to transfer money within the app without any additional charges or procedures that would occur in a bank.

This isn’t the first time Uber has stepped up to accommodate its driver’s needs. The company recently 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. This is where Hazlehurst found out that 35% of Uber drivers have never accessed banking services before. That’s where the inspiration for this update came from. 

With the latest launch, according to the head of the Uber Money, the company hopes to respond to some of the issues faces by Uber drivers on a daily basis as well as to kickstart a new approach that accommodates the needs of those working in the gig economy.

This isn’t Uber’s first big financial venture since one of the greatest things about the app is its smooth transactions. Uber also has a consumer credit card service to get riders cashback on their rides. The company also helps to lease cars to drivers through third-party partnerships. Uber Money is another step toward the company’s growing financial services business. 

What could go wrong?

There are also some concerns regarding this launch in the industry. Considering that Uber Money is quite innovative in its field, the consequences of such endeavors are not quite clear.  The launch is too new to draw conclusions just yet but it also raises a question of how much benefit will actual drivers receive. It is also unclear how accurately the company was able to identify it’s own needs considering it’s been subsidizing takeout, scooter rentals and car shares for the residents of select urban areas worldwide. One of the main concerns around the launch is that there any many Uber drivers currently in debt and struggling to make the ends meet. There is a chance that the company ignored the root of a lot of the problems Uber drivers faces and provided an external solution to the symptoms and not the cause. 

Fintech craze

Financial services have been popping up with the biggest companies in recent months. Uber is just the latest one to show interest in developing in this direction. Apple was one of those introducing financial services, with a credit card made in partnership with Goldman Sachs. Facebook, on the other hand, announced the plans to remake global finance with its Libra cryptocurrency, which has faced quite a few challenges already, with Paypal, Stripe, Visa, Mastercard, and eBay pulling out of the project allegedly because of lack of work done by Facebook to address regulator’s concerns over issues such as money laundering. 

Despite that, the trend is evident that all the big companies see Fintech developments as a crucial must for their survival. Companies are trying to singlehandedly cover the majority of their user’s needs. It’s probable that we will see even more companies branching out to financial strategies. Uber seems to have its eyes on the prize with the approach that fuses financial services with customer loyalty. While the new financial team has great potential to help out its employees, it is not clear whether or not the update will actually become more massive and bring investors in.