Monday 4 November 2019 5:31 am

DEBATE: Will Uber's move into banking succeed or fail?

Andrew Mitchell is vice president for development and infrastructure support at JCB.
and Jim Prior
Jim Prior is global chief executive of WPP brand agency Superunion.

Can Uber graduate from taxi rank to taxi bank after announcing its move into financial services?

YES, says Andrew Mitchell, vice president at JCB.

Uber’s drivers are its bedrock. And growing driver service and revenue options without earth-shattering outlays is shrewd indeed. 

As such, Uber Money is a logical step to maximise its digital-lifestyle standing among its driver base. 

With experienced shareholders and sophisticated account-based app services, Uber already has key ingredients to be that taxi bank for its drivers via its increased control of banking rails and provision of instant fund availability. Additionally, by going all-in for digital cards and wallets, Uber will increase its consumer loyalty and revenue-generation from riders. 

Uber’s previous forays into debit and overdraft services wedded with its form for rapid adjustment should encourage confidence in the solidity of this new venture. 

As Uber’s head of payments intimated, best value is the end game, so we can expect Uber Money services to snowball quicker than a taxi on the Autobahn. 

NO, says Jim Prior is global chief executive of WPP brand agency Superunion.

Uber Money is the latest in a string of moves by Uber that attempts to embed the brand in every element of the lives of consumers. 

But banking is a very different proposition to the other components of its offer, and an Uber bank is destined to fail. 

All those surveys that you see which claim people don’t trust banks – ignore them, they are wrong. Deep-rooted trust from customers is a basic requirement for any successful bank, and Uber is a long, long way from having that. 

While it’s true that several fintech challenger banks have brought some likeable design and functionality to the market, they are yet to make a profit and have failed to disrupt financial services to any profound extent. They are interesting supplements to established banks, but not substitutes for them. 

So for Uber Money, expect an interesting yet profitless flirtation, undermined as a sustainable business by a lack of fundamental trust.

Main image credit: Getty

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