Uber may soon start offering small loans to its drivers
Share this article:
Uber started operating in South Africa back in 2013 when the company was in the middle of a global expansion and saw the good prospects that South Africa had to offer.
Despite some resistance, drivers and their representatives estimate that since 2013, the service has grown to around 4,000 Uber cars in Cape Town alone.
It seems that now the ride-hailing app is analysing offering loans directly to its drivers, according to a report from Recode/Vox.
The news came out after the emergence of an in-app survey sent to some drivers on a “new financial product” aimed at its drivers “in a time of need".
When filling out the survey, drivers were asked about the most important factors when deciding to take out a loan, if they had taken out a small loan in the past 3 years, and if they would be likely to take advantage of affordable loans provided by Uber.
Uber has in mind to put cash in the pockets of its drivers who might need money to cover immediate expenses like insurance and repairs or just to better their finances.
This would not be the first time Uber ventures in the financial space, as it has some previous experience. It offered cash advance of up to USD 1,000 (almost R15,000) to new drivers in the United States in 2016 and they were not charged interest. The main point of the cash advance was to get people who were contemplating joining Uber to take the plunge.
It has also offered leases on new cars to drivers and it currently offers a co-branded credit card with Visa and an Uber Cash digital wallet for riders.
Even though it is unknown whether the financial loans will be interest-free, this possibility might sound enticing to drivers in need of money, as the loan options today in South Africa all charge annual interest that ranges from 8,5% to 23%.
However, there is still no official indication of timing on small loans product offered to drivers, and Uber has not yet commented on the emergence of the survey’s existence. That survey made it clear Uber is exploring the option of offering financial loans, and thus getting into the small loan business for its drivers.
It is still uncertain whether or not Uber will roll out small cash loans to its workers to help them with their financial needs whatever they might be –fixing the car they use to work every day or to make ends meet. If it does launch its financial product, we don’t know anything about what the loans would look like – such as the interest rate, the amount and the conditions.