Ride-hailing giant Uber is making a deeper push into financial services.
The company announced on Monday the formation of a new division called Uber Money to house its efforts, which include a digital wallet and upgraded debit and credit cards. The emphasis, at first, will be expanding Uber's efforts to give its 4 million-plus drivers and couriers around the world access to a mobile bank account so they can get paid after each ride, according to Peter Hazlehurst, who will head the new division.
"We wanted to help everybody understand that there's a new part of Uber that's focused on financial services and that has a mission of giving people access to the type of financial services they were excluded from," Hazlehurst said in a phone interview.
Under pressure to turn a profit amid competition from new ride-sharing entrants around the world, Uber is betting that by building out its financial ecosystem, it can keep drivers and riders loyal to its platform. The company topped 100 million monthly active users this year, many who use credit cards to pay for rides and food orders. Future products could remove costs related to financial middlemen or generate new revenue streams.
In June, CNBC was first to report that Uber was ramping up the creation of financial products by hiring engineers for a fintech outpost in New York.
Uber is rolling out globally a debit card with an enhanced "instant pay" service it has been testing in the U.S. and a few other markets. The feature has taken off in the U.S, with more than 70% of driver payments made using instant pay, according to Hazlehurst. It is essentially a no-fee banking account, with the debit card in the U.S. linked to an account provided by Green Dot.
"Not only do you get access to your earnings in real time, it doesn't cost you anything to keep the money there and you can spend it whenever you want to," Hazlehurst said.