- Uber has launched “Uber Money,” a program focused on financial services like payments and banking.
- Peter Hazelhurst, head of the division, told CNBC that the company would eventually like to offer consumer bank accounts, too.
- For now, the new unit is focused on expanding instant payments to drivers and couriers, as well as a relaunching an Uber-branded credit card.
- Visit Business Insider’s homepage for more stories.
Uber is launching a new financial services product called Uber Money, the company announced Monday.
The new division, which has hired 250 new staff this year, will house the ride-hailing giant’s existing offerings, like popular instant-pay debit cards for drivers and Uber Cash. Eventually, it will offer bank accounts for drivers and couriers, according to Peter Hazlehurst, the company’s head of payments.
“We wanted to help everybody understand that there’s a new part of Uber that’s focused on financial services and that has a mission of giving people access to the type of financial services they were excluded from,” Hazlehurst told CNBC.
And while the move could help bring the world’s un- and under-banked population, of which there are an estimated 33 million in the United States alone, into the fold, there’s also a lucrative factor at work for Uber: saving money. The company, like any other that sells goods or services, must pay third-party companies to process every ride, delivery, and payment.
Those fees can add up, especially given that Uber provided 3.2 billion rides in the first half of 2019 alone, while losing some $6.4 billion
“We don’t have to take the traditional fee income model to operate these services,” Hazlehurst told CNBC.
Pressed if there might be an option to offer consumer bank accounts in the future, Hazlehurst said it’s likely. Digital banks, after all, have surged in popularity recently, with Ally Bank, easily the largest, now ranking among the US’s top 20 banks by assets.
“I think so,” he said. “The reality is that the needs of our partners in the US and in Brazil and in Australia and in India mirror in many ways the needs of consumers as well, particularly in the cash-heavy economies.”
Cash-heavy economies have been learning opportunities for Uber in some cases. In Brazil, for example, at least 16 drivers were killed before the company rolled out increased safety measures.
But there is some hope. Careem, a Middle-Eastern ride-hailing company which Uber is in the process of acquiring, built processes to enable its drivers, called captains, to offload cash in order to avoid the safety risk of carrying large amounts with them.
Uber’s push into payments could also signal the potential for remittances, cross-border payments that totaled $613 billion worldwide in 2017. While mostly concentrated in emerging markets, there are many cases that would make sense for Uber, like in New York, where many drivers are immigrants supporting family abroad.
“The opportunity that we have is to expand to help all of those people have access to financial services,” Hazelhurst said.
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