Uber has launched a new driver-focused program that provides cash advances when needed. The on-demand private car service has teamed with financial service provider Clearbanc on what’s being called Advance Pay. With it, drivers can opt to receive up to $ 1,000 with no interest, but only if they’re in California and Michigan.
In a Medium post, regional general manager Rachel Holt cited a study by the U.S. Federal Reserve that found 47 percent of people in the country “struggle to handle an unexpected bill costing $ 400, with a third saying that they would be forced to borrow to pay.” As Uber continues to press that it’s service offers great benefits to those looking for work or in need of extra income, Advance Pay looks to be a solution to the problem.
Not every driver will be eligible and the company declined to state what the specific qualifications are. However, those that participate in this program can receive up to $ 1,000 in cash, with some of the funds up front and the rest after they’ve taken their first trip as a driver.
The money is provided through Clearbanc and drivers have up to 15 days to repay the advance either directly to the provider or through their Uber weekly earnings. During the pilot program, all automatic payments will be capped so drivers won’t have more than half of their earnings deducted automatically. There’s no restrictions on how often someone has to be a driver.
This isn’t the first tie-up between Uber and Clearbanc, a graduate of Y Combinator’s Fellowship program. Drivers already can link their account to Clearbanc and get their earnings transferred into a Visa debit card. With that, Clearbanc charges $ 2 for each day that it deposits funds into a driver’s account.
In March, Uber launched its Instant Pay option for those drivers in San Francisco to do pretty much the same thing as what Clearbanc offered previously. However, in this instance, Uber partnered with GoBank and there aren’t any minimum deposits or transaction fees incurred. Holt revealed that this pilot program “has been popular so far” and plans to make it more widely available soon.
As the ridesharing war between Uber and Lyft continues to heat up, both companies are pulling out all the stops to entice drivers to their sides, and it largely has to do with the benefits. Lyft has recently introduced its version of instant pay powered by Stripe, along with partnerships with Hertz and Shell to keep its drivers happy while also removing the barriers that would prevent someone from being its partner.
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