What is Uber Advance Pay?
Uber Advance Pay is a $1000 Up-Front Offer for New Drivers
Uber’s Advance Pay program was launched in April 2016 as means of providing new rideshare drivers with initial funds ‘up front’, in order to help get them started while they transitioned into becoming active Uber drivers.
Partnering with Clearbanc (a new online financial service startup), Uber provides $1000 to new drivers as an interest-free advance loan.
The Uber-Clearbanc deal has one caveat — $250 is available immediately to new applicants, but the remaining $750 is only ‘unlocked’ after a driver has completed their first official Uber trip.
Advance Pay was initially available in California and Michigan.
How is the $1000 Repaid?
The $1000 Advance Pay is gradually repaid to Clearbanc and Uber, via a driver’s income generated by Uber trips.
Although the service is technically interest-free, Clearbanc charges a $50 fee if the entire $1000 advance is not paid off entirely within 15 weeks.
Drivers are free to repay Clearbanc at any time they wish — otherwise, some of their weekly income (from completed Uber trips) will be automatically deducted, to pay back their Clearbanc loan in full. Each auto payment to Clearbanc will be limit-capped, ensuring that no more than 50% of a driver’s weekly earnings are deducted towards Clearbanc.
New Uber drivers on the Advance Pay System are welcome to drive as frequently, or as little, as they wish — just like a normal Uber driver.
Does Clearbanc’s Advance Pay System come with any catches? Is it a ‘Payday Loan’ with High-Interest Rates?
As of yet, there is officially NO interest rate or daily fee associated with the Clearbanc Advance Pay Program (despite continued confusion over this question. Clearbanc has officially confirmed there are no hidden daily fees or high-interest charges for Uber Advance Pay).
In fact, Clearbanc’s deal with Uber is much more consumer-friendly than the average ‘pay-day loan’ deal, insofar as it is primarily an initiative launched to incentivize new drivers (drivers who might be short on funds — and need money to get started in the ridesharing business).
Should I Sign Up?
For individuals considering becoming a driver & taking up the Advance Pay deal it’s worth keeping in mind that — despite Clearbanc’s lack of high-interest rates or hidden fees — there are some inherent costs to enrolling in the Adavance Pay scheme.
Signing up for Advance Pay is (in a sense) a commitment to working for Uber in exchange for an immediate cash windfall.
Make sure you understand the basics of ridesharing — specifically, the costs associated with becoming a rideshare driver; the time commitment & scheduling demands associated with running your own business; and the likelihood of generating a profit in your area — before you take the leap into becoming a full or part-time rideshare operator.