Uber will now offer a retirement plan of sorts to its drivers. The world's biggest ride-hailing service teamed up with betterment, a robo-advisor that helps people invest and manage money online. Uber drivers will be able to use it to invest money.
For now, it is only for selected users, those in Seattle, Boston, Chicago and New Jersey, will see the widget in the Uber app where they will be able to open an IRA account. The first year of service is free for drivers and then the wealth company charges a fee of about 0.25% a year, which is less than the typical fee.
We don't have all of the details yet, but Betterment does confirm that Uber will not match funds. All money that goes into the account will have to come from the drivers themselves.
Uber doesn't want their drivers to be official employees, but they do want to improve their lifestyles. The account might not make sense for all drivers, but there are people who are making really good money doing it.
Betterment is one of a few companies that has popped up so that people can take their financial futures into their own hands.
According to Wired, the partnership makes sense for Uber because it "currently manages about 185,000 customer accounts and over $5.5 billion in assets, and now, it can tap into a new reservoir of potential customers. Uber does not disclose how many active drivers it has in the US, but last year, one estimate put the number at more than 300,000–and that base has likely grown."
The average customer of Betterment is a professional around 36 years old who makes $100k per year. An Uber driver makes $13.25 an hour after expenses, so it might not be the best fit yet.
Uber is at least trying, but it does have some way to go.