Ride-hailing giant Lyft is partnering with Mastercard to launch Lyft Direct Debit, a cobranded debit card and bank account with rewards and benefits for Lyft drivers. The card will be issued by Stride Bank, powered by Payfare, and initially available in eight US cities including Atlanta, Los Angeles, and Las Vegas.
Mike Coppola / Getty Images This is part of Lyfts broader Lyft Driver Services program, which it debuted in March. Lyft Driver Services included financial services like a no-fee bank account and debit card as well as discounts on rental cars and vehicle maintenance. Heres what it means:Lyft Direct Debit comes with a suite of benefits catered toward the needs of gig economy workers — an increasingly sizable portion of the US labor force.
The program comes with a debit card that offers 4% cash back on gas, groceries, purchases at select restaurants, as well as other purchases. Debit cards with rewards are rare, which could make this offering attractive — especially given its 4% cash back, which is a higher reward than most no-fee credit cards.
And the fact that the card rewards everyday spending categories could make the offering even stronger. Cardholders will have access to a network of 20,000 no-fee ATMs and Mastercard ID Theft Protection. Lyft drivers will be able to access their earnings instantly. Not having immediate access to funds is a pain point among the nearly 60 million US gig economy workers.
And, in general, immediate access to funds is critical to the financial stability of US workers: 3 in 4 workers in the US are living paycheck-to-paycheck. The card allows drivers to access their funds instantly, which will likely appeal to gig economy workers who want immediate access to their wages.
Drivers will have access to a no-fee bank account and automatically set aside earnings for saving. Drivers will be able to automatically set aside earnings to help them reach their savings goals. US consumers pay an average of $163 annually in bank fees, so a no-fee account could be especially useful for this segment.
The bigger picture:Ride-hailing firms globally are pursuing financial services for a number of reasons — Lyfts push is likely for driver retention and to more effectively compete with Uber, which offers comparable services. Southeast Asian ride-hailing leader Grab offers the most comprehensive set of digital payment offerings among the ride-hailing firms.
As part of its push to become a super app, engaged with every aspect of a consumers life, Grab is spearheading the movement of ride hailing into payments. The ride-hailing giant offers a set of financial services substantial enough that its even considering spinning off its Grab Financial Group into its own business unit.
. Grabs services range from its mobile wallet, dubbed GrabPay, to an insurance and loan offering business. Meanwhile, Uber has been mirroring Grabs strategy in the US in a bid to retain and poach drivers from Lyft......