Uber is trying to make it easier for its drivers to save for retirement with a newly-announced partnership with Betterment, an online savings service.
The feature takes its place among a growing number of driver perks now being offered by Uber and Lyft, its main U.S. rival, even as the companies strenuously fight in court over whether they’re obligated to provide drivers with employee-style benefits.
Under the partnership, drivers will be able to access Betterment’s services directly through the Uber driver app. Drivers will pay no fees for the first year to use Betterment, which offers “robo-advisor” services, investment guidance based on computer algorithms.
After a year, Betterment says it will charge fees in the area of .25 percent of the account value, less than is charged by traditional retirement companies.
And there’s no minimum for Uber drivers to open an account, an important factor considering that Uber drivers’ take-home pay has been calculated to be barely over $13 an hour in major markets, and even less in smaller ones.
The service will first be offered in Seattle, Chicago, Boston and New Jersey, with other regions expected to follow.
As Uber puts it: “Saving — especially for the long term — is tough. Whether it’s an unexpected bill or a weekend splurge, too often the money we meant to stash away for tomorrow tends to find its way out the door today.”
Of course, it remains to be seen how much Uber drivers will be able to sock away for retirement. Both Uber and Lyft have had to contend with disgruntled drivers in some markets, after they cut fare prices earlier this year.
To be sure, Uber is not offering an employer contribution; this would contradict its fundamental position that its drivers are independent contractors. Drivers and labor activists have challenged this contention in court, arguing that Uber and other ride-hail companies have improperly deprived drivers of mileage compensation and other benefits normally enjoyed by legal employees. In one of the most high-profile cases, a federal judge in California last week invalidated a $100 million settlement between Uber and drivers in California and Massachusetts, calling it unfair to the drivers.
The deal with Betterment is the latest example of a partnership with ride-hail companies aimed at giving drivers discounts for gas, car repair and other services. The deals, of course, benefit both the drivers and the corporate partners of Uber and Lyft, which stand to gain hundreds of thousands of customers.