Ride-hailing company Uber Technologies Inc. will start letting its drivers cash out their earnings whenever they want, an option that rival Lyft has offered since December.
Both services are trying to help their drivers who need cash right away for a sudden expense. Drivers at both companies are typically paid weekly, but it can often take several days for the money to land in an account.
Uber is starting a pilot program on Thursday in San Francisco for its service, called Instant Pay. Drivers in the program sign up for a bank account with Green Dot Corp.'s GoBank, which usually costs $8.95 a month but is free if drivers make a deposit at least once every six months, the company said. Cashouts are free and don't require a minimum amount. The money appears in the account, and drivers can spend it through a debit card or withdraw it from an ATM. (Withdrawals are free at 42,000 ATMs in the U.S.)
Lyft's version, called Express Pay, has a few differences. Drivers have to have $50 available before they can cash out, and they're charged 50 cents each time they use the feature. But the money, which is processed by Stripe, goes to the same account as their regular weekly pay.
Lyft's service is available across the U.S., and the company said it's hugely popular with drivers. Thirty percent used it in its first month. "It's by far our most successful product ever in terms of adoption," said Katie Dally, a spokeswoman for the company. The number of cashouts per month has grown, as has the amount of money, she said. The average withdrawal is $110, and the program has moved $100 million in its first three months.
Many drivers appreciate the option to cash out quickly, and it's been a selling point for Lyft in the battle against Uber to secure drivers. "It comes in very handy," said Roberta Robinson, a Lyft driver who lives near Baltimore. Robinson said she uses Lyft's cashout service almost every week. This week, for example, she plans to drive Thursday and Friday nights, and cash out on Saturday morning to help pay for her 14-year-old daughter's birthday party scheduled that day at Dave and Buster's.
At least one startup will be disappointed that Uber is releasing this feature. When Clearbanc launched in October, its first product was an "instant advance" service that targeted Uber drivers hoping to get paid out before week's end, though at the time the company said it planned to expand into a suite of banking services for freelancers.