Uber is assembling a fintech team in New York City (UBER, LYFT)
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Uber is reportedly hiring several dozen engineers and product managers in New York to assemble a fintech team, per CNBC, citing people with knowledge of the plan.
Tapping into the finance talent pool in New York, Uber could grow its team to 100 employees. This news closely follows Uber’s IPO filing, which offered a glimpse into its massive card business, underscoring its potential to further establish a position in financial services.
Here’s what it means: This move is likely a play to better compete with Lyft for drivers, increase engagement within its own service ecosystem, and cut processing costs.
Lyft offers financial products that allow it to retain drivers on its platform. Lyft offers services like Lyft Driver Direct, a rewards debit card and no-fee bank account for its drivers, both of which could be useful driver retention tools and that allow it to meet the needs of gig economy workers — a major segment of the US workforce.
Enabling customers to access financial services from Uber can keep them engaged in its ecosystem.Uber sees about 87% of its gross bookings — defined as the total dollar volume across its services — made with credit or debit cards, representing a large addressable base that already stores their payment information with it.
Uber can cut major costs associated with card processing fees.Uber saw $43.5 billion in card volume in 2018, and while it didn’t disclose how much it paid to accept cards in 2018, Uber paid $749 million in credit card processing fees in 2017, up 62% from $461 million in 2016.
The bigger picture: Uber could …read more
Source:: Business Insider