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Wednesday, February 1, 2023

Uber promotes bank accounts in cash-centered Mexico

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Uber launches its debit card for drivers in Mexico. Photo: Courtesy

Uber is working with BBVA bank and Mastercard to launch a debit card for their drivers in Mexico in a gambit to promote banking in a country that runs on cash.

“Uber supports the extension of financial services in the country,” said Federico Ranero, Uber Mexico’s general manager.

The launch marks the first time that Uber has offered such a card outside of the United States, Ranero said. The free debit card will be rolled out in Mexico City, Tijuana, Monterrey, Puebla, Merida and Guadalajara, and will eventually be extended to the rest of Mexico.

Uber and other tech companies have had to find new ways to do business in Mexico, where more than half of the population is unbanked. Even Mexican President Andres Manuel Lopez Obrador frequently says that he does not use a checking account or credit card.

Uber already lures people into the financial system, Ranero said. Uber drivers must have a bank account to receive their earnings, and about 35% of the company’s workforce in Mexico opened an account to do just that, he said.

Drivers will open their accounts in the Uber app without setting foot in a bank, said Carlos Lopez-Moctezuma, head of open banking at BBVA.

Uber has also sought to reach riders who do not have bank accounts by accepting cash fares, but the policy has been met with resistance. In late April, Mexico City’s government issued rules that prohibit cash payments for ride-hailing services like Uber and require drivers to register with the city, among other measures.

Ranero said the company is seeking to discuss the issue with city regulators but will continue to accept cash fares in the meantime.

“We believe this is a constitutional right of our riders and drivers,” he said.

Source: Reuters

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