To date, Lyft drivers have cashed out $500 million since the company launch its Express Pay feature.
Surprise, surprise. It turns out ride-hail drivers want access to their money as fast as possible.
In December, Lyft introduced a feature called Express Pay that allowed drivers to instantly cash out the money they made performing rides instead of waiting to be paid at the end of every two weeks.
Today, 50 percent of all of the company’s driver payments are done through Express Pay, which the company created in partnership with payments company Stripe. In total, drivers cashed out $500 million since December, according to the company.
For Lyft, this is a needed win. As Uber sets its sights on filing for an IPO, the company is expected to get exceedingly aggressive about competing for drivers through subsidies and promotions. While Lyft has historically matched many of Uber’s promotions, the younger ride-hailing company’s resources are relatively limited compared to Uber’s. So the company has worked hard to find other ways to differentiate its service for drivers and riders.
There’s no clear indication that drivers are joining Lyft over Uber or any other ride-hail company because of the availability of this service — Uber rolled out a similar albeit limited feature shortly after Lyft — but it is clear that drivers see Express Pay as a benefit, according to Lyft’s Vice President of Product Tali Rapaport.
“At a high level, when we treat drivers well they treat passengers well I think that’s pretty core to our success,” Rapaport told Recode. “[For example,] we have in-app tipping to encourage the positive relationship between the passenger and the driver and to recognize that a lot of our drivers do go above and beyond.”
Lyft approached Stripe — which already processes all of the company’s payments — about creating an instant cash-out service after many of its drivers requested a service like it. It’s a new product for both Lyft and for Stripe, which typically performed transfers that took two to three days and could only be processed during banking hours. The volume of Lyft’s transactions, according to Stripe, is nothing they can’t handle.
“If Lyft was to do it themselves it would be a pretty significant engineering effort,” Stripe’s Cards Lead Lachy Groom told Recode. “It would be an insane amount of effort for all the marketplaces to do it themselves. Stripe can do this internally. We build our infrastructure internally so that they don’t have to. The thing we measure our success by is how small our partners’ payments teams are.”
But ride-hail drivers aren’t the only subset of workers who might benefit from instant cash outs. Stripe isn’t working on a product that would help all employees gain access to their income immediately just yet. But there are several startups that are trying to find ways for employees, full-time or otherwise, to gain immediate access to money they’ve already earned that are beginning to crop up.
Softbank-backed Payactiv, for example, started by working with contingent workers and argues that when employees are paid is as crucial an issue as how much they are paid. Increasingly, people are looking to access the money they’ve already earned for things like emergencies or to pay bills, Payactiv Safwan Shah once told Recode. Payactiv specifically is trying to work with employers to give workers access to their money instantly, either deposited into bank cards or through strategically located ATMs, instead of waiting to be paid bi-weekly or to seek out payday loans.