The mobile app economy is hot stuff today, driving innovations in how we shop, how we date, how we catch a ride, and so much more. One thing the app economy has not been so great at is matching up with how we like to pay. Take Uber
as a prime example – the popular app-driven ride-hailing service recently realized that cashless payments may not be all the rage after all, and started accepting cash payments for its drivers in select markets.
To fully understand the import of such an event, it’s helpful to understand the phenomenon that is Uber. A few quick facts:
- Uber is the number one ranked travel app on the Apple App Store and the 27th most downloaded app overall as of March 1, 2016, per appannie.com.
- Uber crossed over the one billion rides mark – yes, billion with a B – on December 24, 2015, according to a company press release.
- Uber riders hail two million rides per day – a number that has surely grown since it was reported in a September 2015 Fast Company interview with Uber CEO Travis Kalanick.
For those who have not caught an Uber ride yet, the process is pretty simple – open the Uber app when you need a ride, select the class of vehicle you would like to catch a ride in, mark your location on a map (this is where the driver will pick you up), take your Uber ride, and pay through the Uber app upon ride completion. Pretty easy, unless you don’t want to pay through a card linked into an Uber account.
Many people prefer cash, or only use cash, for a wide number of reasons. Regardless of the reason, cash is, and will remain, a critical and preferred payment method for people the world over. Realizing that cash holds an important place in the economy, Uber decided to go along with the will of the people. It piloted a cash option within its app in Hyderabad, India in May 2015, and Uber has subsequently opened up the cash option in 10 countries, though not in the United States – yet. Uber will likely find a positive response if they start allowing cash payment in the U.S. In a survey
sponsored by Cardtronics in late 2015, 62 percent of respondents said they used cash to pay taxi fares. By comparison, credit and debit cards were tied as the next most used form of payment – at approximately 16 percent.
Mike Brown, an Uber executive in the Asia region, told TechCrunch, “We recognize that not everyone uses a credit card and there are different payment mechanisms in different places. We want to be able to serve everyone so, fundamentally, everyone needs to accommodate our system or we need to accommodate how riders in other markets pay.” See the full TechCrunch article here
What does the Uber pivot to cash mean for the larger app economy? As a global leader and trendsetter, decisions Uber makes help pave the way for others. Certainly not every app will work well with cash – a physical touchpoint, like an Uber driver, makes the exchange of physical currency viable – but every app needs to consider how cash can enter its ecosystem, and app-centric companies with a physical presence, whether delivery services or dog sitters or room sharing set-ups, should take a page from the Uber playbook and incorporate cash into their payments matrix.
SVP of Marketing