On demand ride service Uber has partnered with Green Dot to create a pilot program that will provide checking accounts for its drivers that will enable them to get paid instantly.
The ride-hailing giant is partnering with Green Dot’s GoBank to launch a pilot program called “Instant Pay” in San Francisco today. Drivers will be able to apply for an Uber debit card from GoBank, which would give them access to their earnings immediately. So, after completing a fare, Uber drivers can have their earnings sent to their account, with no minimum to cash out or any transaction fees for transfers. Without the account, it can take up to four days for a driver to be paid.
What is not clear is who is taking the risk for instant payments to the account. If for some reason there is a chargeback or problem with the rider’s credit card, then someone will be on the hook for the funds. It is not clear whether Uber or Green Dot is taking the settlement risk. It is also not clear whether there is a claw back option when funds could be reclaimed from the driver. The accounts can be used for direct deposit from other providers, but instant cash will only work with Uber. Other deposits will take the normal time to clear.
Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group
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The press release announcing the account can be found here
