Uber To Offer Struggling Drivers Cash Loans
It appears that Uber is exploring the option of directly offering financial loans to its drivers.
The rideshare giant sent out an in-app message to some drivers this week saying it’s “building a new financial product” to help Uber drivers with their finances “in a time of need,” and asked recipients to fill out a survey.
“Have you taken out a small loan (of a dollar amount below 1,000 USD) in the past 3 years?” reads one of four questions. Another asks: “If Uber provided loans, what amount are you most likely to request?”
The options to answer range in brackets of “Less than $100,” “Between $100 and $250,” “Between $250 and $500,” and “More than $500.”
Even though it sounds weird, Uber offering financial services isn’t exactly new. The company piloted an interest-free cash advance program for drivers in California and Michigan back in 2016. It also currently offers a co-branded credit card with Visa and an Uber Cash digital wallet for riders, and helps lease cars to drivers through third-party partnerships.
However Uber’s move to offer smaller payday-type loans to drivers, many of whom are struggling to make ends meet and have big debts, is prompting some politicians and drivers to criticize the company.
They are both very skeptical as a result of Uber and Lyft spending tens of millions of dollars to fight California legislation that could force companies to provide workers with a minimum wage and other employee protections such as sick leave.
When asked many Uber drivers said that they wouldn’t trust a company like Uber when it comes to asking for a loan.
The same feeling has been shared in social media groups where Uber and Lyft drivers connect with each other to discuss their work and the latest company policies affecting gig workers,
If Uber does end up offering its workers small cash loans, it wouldn’t be the first major company to do so.
Many other employers, such as Walmart, have started offering payroll advances and loans to their own cash-strapped employees, with interest rates generally varying from 6 to 36 percent, according to the WSJ. And plenty of other payday-type loan services specifically target ride-hail drivers who might need money in a pinch to cover immediate expenses, including to fix the cars they drive for work.
At least for now, it’s not clear whether or not Uber will officially launch its new financial product, and we don’t know any details about what the potential loans would look like when it comes to interest rate etc.
However what is known for sure is that Uber should expect some tough questions about what its driver loans would look like and how they’ll impact its drivers.