Uber Money issues digital wallets – how long before it accepts Facebook’s Libra?

A two min summary of the article below, with a video link at the end to learn more about this analysis of Uber Money

Uber platform has reported, in its latest earning’s announcement, that it now has over 100 million active monthly users. The number of trips that people booked using Uber in the last year has grown by 35% and its subsidiary, Uber Eats, has grown by 140% in that time too! Uber’s statistics, as reported by the Business of Apps, are impressive by any account:

• Uber is available in 65 countries and over 600 cities globally
• 14 million Uber trips are completed each day
• over 10 billion trips have been completed worldwide
• Uber has 3.9 million drivers worldwide

Uber has long been thought of as a good case study for the use of Blockchain technology, but it is interesting to note in an article in 2018, from Kryptographe, that highlighted four potential taxi competitors of Uber which were using Blockchain technology and/or Digital Assets. The firms that were written about were La’Zooz, Arcade City, Snagride and Chasyr. As an aside, I am not sure why Chasyr (on its website) shows a Deloreancar, not exactly a model of business success, as its founder was arrested in a $24million cocaine deal back in the 1980’s!

I digress because, if you look at Etherscan, which shows the use and activity for Crypto currencies using the Ethereum Blockchain, you will find scant use regarding any of the tokens the above four, themselves, launched. Seemingly, there are others who have argued that Blockchain technology may be the death of Uber, since the technology could allow drivers to be put directly in contact with customers. Uber operates almost like a central clearing house, connecting those who are looking for a taxi with the nearest available driver and car.

Thus, the service feels like it is decentralised, but it is not since all the parties use Uber’s platform. The client submits a request for a taxi using Uber’s app. This then sends a vehicle, following which the customer pays Uber (from which Uber pays the driver once it has taken a share of the fare for using the Uber platform).

However, given some of Uber’s main shareholders ( some of whom sit on Uber’s board) –  Matt Cohler, Google, Softbank and Saudi Arabia Public Investment Fund –  and their interest in payments and transport projects using and investing in businesses that use Blockchain technology, one wonders how much attention Uber is giving to Blockchain technology and/or Digital currencies?

Uber Money represents a further move into financial services, as it already has a ‘tie up’ with Mastercard (which was used by drivers to the tune of $5 billion in the first half of 2019). Any initiative to increase profits cannot come too soon given Uber’s massive losses as, in August 2019, Uber was reported to have lost  $5billlion in this last quarter! Peter Hazelhurst ,who is head of Uber Money, was reported on CNBC as saying,

“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.” Also, while talking about Uber’s digital wallet, Hazelhurst further added, “Uber Wallet that riders and drivers can use to store dollars, track their transaction history and make electronic payments. Apple Pay and Google Pay will be integrated with the service early next year so drivers can immediately spend their earnings, even without a physical debit card”.

Given that Uber has a rapidly growing business in countries like India, where many of its rides are paid for in cash as citizens do not have bank accounts, a Digital solution there makes a lot of sense for Uber and its drivers. Indeed Uber would like Uber Money to be the bank account which all its 4 million drivers use.

Subsequently, while there is no mention of Digital Currencies in Uber’s announcement of Uber Money, the fact that Uber is one of the founding members of Facebook’s Libra Digital currency, how long will it be before we see ‘Uber coin’? Maybe Uber wishes to learn from its involvement with Libra as to how to launch a Digital currency – or just be happy to use Libra and therefore improve Uber’s profits to bypass the transaction fees and charges that banks levy to process payments.

Being part of the Libra Association means it would be easy for Uber to integrate Libra into its new platform, propelling mass adoption of Libra and Uber into Cryptocurrency.

Uber Money issues digital wallets, what could this mean for FB’s Libra?

For a weekly selection of articles about developments in the Blockchain and Digital Assets sectors ask for DigitalBytes and email me [email protected]

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