Piloting Payment Innovations: Advance Pay and Instant Pay
By Rachel Holt, Regional General Manager
Research by the Federal Reserve has found that 47% of people in the U.S. would struggle to handle an unexpected bill costing $400 — with a third saying that they would be forced to borrow to pay. Oftentimes, people who face cash shortfalls have turned to payday loans at very high interest rates, or credit card debt.
Uber offers flexible work opportunities, where people can drive as much or as little as they want to meet their own goals and needs. Many people drive with Uber to reach a specific goal — like a new computer or a vacation. Others may find they need extra cash when the unexpected happens. In response to feedback from drivers, we’ve been working to find new ways to have drivers have even greater flexibility in when and how they access their earnings from driving with Uber — so they can meet their needs, especially to help cover an unanticipated expense.
In March, we began piloting Instant Pay to drivers in San Francisco and a handful of other states. With Instant Pay, drivers can apply for an Uber Debit Card from GoBank and then cash out their earnings instantly and easily at any time, with no minimum deposits or transaction fees. The pilot has been popular so far and we hope to make this feature more widely available soon.
Today, we’re starting a new pilot in California and Michigan to offer Advance Pay with Clearbanc, a financial services provider for self-employed professionals. We’re excited about this pilot with Clearbanc because Advance Pay will help connect people most in need of immediate, additional income with reliable, flexible work at the push of a button.
In the Advance Pay pilot, Clearbanc will offer eligible new drivers a cash advance of up to $1,000 with no interest. Participating drivers will receive some of the funds up front, and the remainder after they take their first trip.
Drivers can repay Clearbanc directly at any time or will have some of their weekly earnings with Uber automatically go to Clearbanc until their cash advance is paid back in full. In this pilot, each automatic payment will be capped so that drivers never have more than 50% of their weekly earnings automatically deducted. Participating Driver-partners can drive as often or as little as they like, just like any other driver-partner.
“Clearbanc empowers self-employed professionals to reach their financial goals. We’re excited to partner with Uber to pilot Advance Pay as a clear alternative to existing credit options.” — Andrew D’Souza, Clearbanc co-founder and CEO
We look forward to seeing how these pilots progress and to making innovative payment solutions more widely available to drivers soon.