A lot of companies want to be the "Uber" of banking and payments. And it's starting to look like Uber itself wants that role as well.
The popular ride-sharing service announced a partnership Thursday with Green Dot Corp. that will allow its drivers to get paid instantly, rather than waiting for a weekly check. This deal follows an earlier pact with Facebook to allow consumers to order and pay for rides from within the Facebook Messenger chat app.
The new service, called Instant Pay, should help Uber Technologies compete for drivers with Lyft, a rival app-based taxi service that started offering real-time payments to its drivers in December. The offerings from Uber and Lyft demonstrate that the so-called gig economy, in which workers set their own schedules, is challenging long-standing assumptions inside the payments system.
Prior to Instant Pay, Uber drivers typically received weekly paychecks each Thursday for work they did three to 10 days earlier.
“Drivers say they’d like to have the flexibility to decide when to get paid,” Wayne Ting, Uber’s general manager for the Bay Area, wrote in a blog post Thursday.
For hundreds of thousands of ride-share drivers in the U.S., the options from Uber and Lyft have both pluses and minuses.
San Francisco-based Lyft does not require its drivers to establish new bank accounts, but it does charge them 50 cents for each transfer. In addition, Lyft’s drivers have to wait until they have earned at least $50 before they can use its Express Pay service.
On the other hand, Uber drivers who want their earnings right away have to sign up for a bank account through Green Dot’s GoBank. The accounts cost $8.95 per month, but that fee can be waived under some circumstances. Each transfer is free, and there is no minimum amount that can be transferred.
For now, Uber’s Instant Pay is available only in San Francisco and a handful of other unnamed cities. An Uber spokeswoman said that a wider rollout is planned, but declined to provide details.
The Uber partnership represents a potential new source of revenue for Pasadena, Calif.-based Green Dot. GoBank, a three-year-old mobile-based checking account, has fallen short of enrollment targets set by the company.
Uber and Green Dot did not release projections on how many drivers are expected to sign up for the service; Uber has more than 400,000 active drivers in the U.S., which means they made at least four trips in the past month. Lyft said that about 35% of its drivers have used Express Pay since its launch four months ago.