The world’s largest ride-sharing platform is going Fintech.
In a corporate announcement, Uber (NYSE:UBER) said they were introducing “Uber Money” a series of services that will provide benefits to their drivers plus a relaunch of their consumer card. Uber said they have established a team at Uber to work on “financial products and technologies that deliver additional value for the Uber community, all at Uber speed.”
Uber is joining a legion of non-traditional firms offering financial services as the sector continues to disaggregate and re-build as financial services become ubiquitous. As the saying goes, we need banking services – we just don’t need banks. Uber’s announcement is just further proof of the wisdom of this statement.
Rolling out soon is a series of financial services from Uber. They include:
- 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. We also want to make every dollar earned on Uber go further, which is why 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: We are also relaunching the Uber Credit Card, our flagship consumer product, in partnership with Barclays. Cardmembers 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.
Uber has created an API to enable outside entities to plug into their platform while “turning membership rewards in to Uber cash.”
Uber is not unique in its strategy. Plenty of big techs have moved into Fintech.
Amazon provides loans to its sellers leveraging the tons of data generated from sales. Something traditional banks simply cannot match.
Apple has partnered with Goldman Sachs (Marcus) to offer a digital-first credit card with plenty of bells and whistles. Apple Pay is the leading payments platform in the US.
It all comes down to the fact that the digitization of finance is upon us. Old financial services firms are struggling to adapt as the legacy of analog banking and a culture of inertia makes it challenging to change. In fact, a recent report on Banking by McKinsey said that the “call to action is urgent” and “the time for bold and critical moves is now.” If Uber offering payments is not another sign, I do not know what is.
First, it happens slowly, and then it happens really fast. And then it is too late.