Many people have found new part-time jobs and/or full-time careers by becoming drivers for the ride-hailing firm, Uber. The hours are flexible and the freelance drivers don't need specially medallioned cars. And as of this year, drivers can elect to get paid one or more times per day rather than weekly. However, until now, drivers had to have a GoBank account to receive their pay daily. That changed last week when Uber created its Instant Pay program for debit cards from Discover, MasterCard and Visa.
GoBank is a subsidiary of Green Dot Corp, the Pasadena-based prepaid debit card issuer. The new program, Instant Pay, no longer requires Uber drivers to have a GoBank account, as any bank account with an associated debit card from the three major issuers will suffice. To date, about 80,000 drivers have opened GoBank accounts simply for the sake of receiving daily pay.
Uber's Instant Pay is finally appearing about eight months after arch-rival Lyft introduced a similar program. Lyft's Express Pay program proved to be enormously popular with drivers who were eager to get paid quickly. Who wouldn't, right?
The Instant Pay program will probably ratchet up the number of drivers electing daily pay, since they will no longer have to go through the hassle of opening a GoBank account.
As you might imagine, Green Dot is probably not thrilled about losing its monopoly, but it's still involved. It will receive a share of the 50-cent fee charged every time a driver receives a payment into a non-GoBank account. It will also remain the instant payment processor for Uber drivers. In addition, Uber will continue to offer GoBank accounts to new drivers, which might be convenient for those who do not have bank accounts to start with.
Green Dot is looking to set up similar programs with other companies that function largely on a model that hires freelance workers, such as the restaurant on-demand delivery service DoorDash and the courier service Postmates, although the company has declined to name specific partners just yet.
Uber also announced that it will team up with the robo-advisor website Betterment to make it convenient for drivers to invest money for retirement. The new program, initially slated for New Jersey, Chicago, Boston and Seattle, will involve the introduction of a new widget on the drivers' Uber app.
Clicking on the widget will allow drivers to open an IRA account with Betterment, and the first year of service is free for the drivers. After the first year, the IRA will charge an annual fee of 0.25 percent, which is less than that charged by traditionally managed IRAs.
Uber will not provide any matching funds for the IRA contributions, though. The ride-sharing company is fighting attempts to reclassify its drivers as employees, and the new InstantPay and Betterment programs are seen as ways to appease their freelance work force. In that vein, Uber recently began paying drivers for wait times of two minutes or more.