Ride-hailing service Uber already connects its drivers, even those with bad or no credit, with car loans. Now drivers can also get an Uber credit card.
The Uber Fuel Card, issued by MasterCard and FleetCor, will allow qualified drivers to get discounts of up to 15 cents a gallon on gas purchases at thousands of U.S. gas stations, the company said Tuesday. Drivers are limited to $200 of gas purchases per week, which will be automatically deducted from their earnings.
Only drivers who completed 200 rides the previous month (or have done 200 rides in their first month) can use it -- a tactic Uber's vice president of strategic initiatives David Richter called a "driver retention strategy." Uber drivers are freelancers, and Uber can't demand that they only work for Uber and not for rivals like Lyft. But they already offer plenty of financial incentives -- like a tiered commission structure and hourly earnings guarantees -- to encourage drivers to spend all their time on Uber.
The gas credit card is part of Uber's driver rewards program, called Momentum, but the previous offerings were only discounts on items like car maintenance and a health insurance shopping tool, not a product that offers drivers temporary credit.
Instead, the credit card is more like Uber's car financing program, which allowed drivers with bad credit or no credit history to apply for loans for a new car, based on the promise that they would have a stream of income -- driving for Uber -- to pay it off. The car-financing program came under scrutiny last year because two of its partners were under federal investigation for potentially dubious loans and because drivers said the program pressured them into taking the high-interest-rate offer.
The gas credit card is a lower-stakes product -- no driver will be saddled with several years of car payments if something goes wrong -- but it indicates Uber isn't done offering drivers credit because of their income working for the company.
"Unlike with a typical credit card, (drivers) don't have to go through credit checks," Richter said. "Some don't have credit cards. This allows them to get gas money upfront" and pay off as they go.
The card offers 1.5% off gas purchases anywhere MasterCard is accepted. On top of that, over 18,000 gas stations across the U.S. -- 2,600 from ExxonMobil, the card's first partner -- will offer discounts of 3 cents to 9 cents a gallon, some starting later this summer. Drivers can look through an interactive map on the Uber app to find the closest and best gas deals.
Uber does not receive a referral fee or any other revenue from drivers who sign up for or use the credit card, Richter said. But "we're not pure altruists," he added. "The way we make money is through the basic revenue model" -- and the more drivers drive for Uber to qualify for the card, the more Uber earns. Drivers do not pay interest on any money owed if they spend more than they earned in a week.
The gas card is a welcome perk for drivers, for whom gas costs are often the biggest expense associated with working for Uber. But there's still some skepticism about taking a deal in which they are indebted to Uber, even if just for a month at a time.
"A lot of these programs and rewards sound great on the surface, but they don't provide a ton of value to drivers," said Harry Campbell, who blogs about driving for Uber and Lyft as well as about personal finance. (He is also a Forbes contributor.) "Most drivers also don't trust companies like Uber so even if there was a decent benefit, it would likely go unnoticed or unused."
