Uber Getting Aggressive with Retirement Plans for Drivers

Uber, the popular taxi service that allows you to hire a private driver with just the tap of a smartphone screen, is getting serious about helping its drivers save for retirement. By partnering up with Betterment, a popular investment app, drivers can now create free accounts to help them save for retirement.

Why Is Uber Getting So Involved?

According to Uber’s North American General Manager, Rachel Holt, people in the United States are struggling to save for retirement. She also claims that many of the Uber drivers across the country have mentioned their desire for a retirement program that would allow them to better prepare for their economic futures. Uber is part of a shared economy system, or one in which people get to work for other people rather than for huge corporations. The main downfall, according to Uber drivers, is the fact that they have no access to perks like healthcare or even 401(k) accounts. Access to the Betterment app directly through Uber can alleviate some of the worry.

Who Is Currently Eligible?

Right now, the only drivers in select places have access to the Betterment app. These include the entire state of New Jersey as well as cities such as Boston, Chicago, and Seattle – places where Uber is more than just an alternative service and is a new way of life. These drivers are also gaining access to other perks that many employers simply don’t provide, such as discounts on their cellphone services and even auto repairs. It is hoped that by providing these discounts, Uber drivers will be able to better afford their own healthcare services and have more left over to save for their retirement.

How Betterment Works

Although only select drivers have access to the Betterment account through Uber, the company claims that it will soon roll the offer out to any and all drivers who would like access to it. According to CNNMoney, Betterment is one of the best investing apps of 2016 due to its overall simplicity, ease of use, and effectiveness. Betterment simply asks the user a few questions and then invests that user’s money across several diverse areas, thereby making it easy for people who know absolutely nothing about investing to make the right choices. The fees are among the cheapest on the planet, too, considering that users only pay index funds that range from .15% to .35% depending on the amount of money they invest.

Uber’s Role

Betterment is not a 401(k) account, so Uber will not be matching their drivers’ contributions. This is different from the accounts other, more typical employers provide – they often match contributions dollar-for-dollar up to a certain amount. This is done to help employees save more money, and to encourage them to save more of their own paychecks at the same time. While this is bothersome for some drivers, others claim that the ability to work when they want, where they want makes up for the lack of perks.

It is hoped that other companies like Uber will eventually start offering similar benefits, including access to Betterment. It is also hoped that they will eventually match employee contributions in such a way that they also encourage employees to save more – even if their contributions are only pennies on the dollar.