A teaming of two tech stalwarts, Uber and robo-advisor Betterment, resulted in a retirement account pilot program announced in the summer of 2016.
It aimed to offer flexible retirement accounts with no fees for the first year to people who drive with the Uber platform and was seen as something of a test for similar initiatives in the “gig economy.
So, one year later, how’s it going?
More than 2,500 Uber drivers have signed up, according to Bloomberg BNA.
“If you look at the market, the amount of people who have used the service is in line with what we’d expected” when the companies announced their partnership one year ago, Joe Ziemer, Betterment’s vice president of communications, told the news service.
Uber has been under fire from more entrenched livery and taxi cab companies in certain cities, and some saw the retirement benefit announcement as a way to counter accusations of low wages and no benefits, a problem that’s plagued independent contractors for some time.
Uber cited statistics from the Federal Reserve which finds that nearly one-third of Americans have no retirement savings or pension. And research consistently shows that when people have access to a 401k or similar retirement account, they’re more likely to save than not.
“Drivers in select cities can use the Uber app to open a Betterment IRA or Roth IRA for free for the first year,” Rachel Holt, regional general manager for US and Canada, said at the time of the announcement. “People who drive with Uber can get started with no minimum account balance, and Betterment’s team of experts is available seven days a week to walk investors of every skill level through every step of the investment process.”
With Uber, you can push a button “and get work,” the company added. “Now drivers can use the same app that gives them “complete control over their time and schedule to have the opportunity to take control of their financial future as well.”
“I love being my own boss,” said Gary K., who drives with Uber in Seattle, Washington. “The ability to save money and invest in my own future and retirement through the app is just awesome.”
The offer is available to drivers in Seattle, Boston, Chicago and New Jersey, and the company plans to work with Betterment to roll it out nationwide soon as part of their Driver Rewards program of rewards and discounts, available to people who drive with the Uber platform.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
