Beyond Uber: Green Dot enters the bigger gig economy

Driving an Uber car isn't like many other jobs, and drivers' payments and expenses are also very different. Much of those differences are built on Green Dot technology, and the bank is ready to see if its platform can work for more than just Uber.

It's never a given that a product that sparks one company's success will work for another company. A classic example is Starbucks, which was so ahead of the game in mobile payments that many predicted it would package its technology and become a fintech vendor. But that never happened — likely because the Starbucks app owed too much of its success to the gift card and rewards platform it was built on.

At the other end of the scale is Amazon, which has successfully opened its payments and fulfillment systems to third-party merchants, blending them almost seamlessly into its own website.

It's up to Green Dot to prove whether the technology Uber uses, called SimplyPaid, is another Amazon or another Starbucks.

Chris J. Ratcliffe/Bloomberg

"SimplyPaid ... is essentially the Uber payment app. It's the way for employees to get paid, and we're in discussions with dozens and dozens of companies, many of which are in the gig economy," said Brett Narlinger, Green Dot's chief revenue officer.

Uber uses an API to access Green Dot's platform to pay drivers immediately and to offer cash-back rewards for gas purchases on its debit card. In about a month, Green Dot plans to offer a hosted version of this system, allowing other companies to create their own customized payments offerings.

Narlinger wouldn't name the companies testing the hosted version of SimplyPaid, but said many of them are developing distinct use cases for the technology.

In the original example of Uber, the ride-sharing company challenged Green Dot to do one thing, Narlinger said: "Can we kill payday?"

Uber didn't think it was necessary for drivers to wait two weeks to get paid, especially when expenses such as gas and car maintenance can't wait that long. Through Green Dot's platform, Uber drivers can choose to get paid immediately after dropping off a passenger. This is useful to drivers who need cash right away — but it's also optional, and if drivers prefer to get paid every two weeks, they can choose that as well.

"Some of them don't want to be paid instantly … we're not forcing it," Narlinger said. "The dilemma we're solving for is employee choice — that employees have had virtually no choice in how they're paid or when they're paid, other than where to direct deposit their funds."

Besides enabling faster payments, Green Dot's technology supports the new Uber debit card from the issuer's GoBank brand. The card gives 3% cash back on PIN purchases at gas pumps, which is unconventional in two ways: It's a reward category more likely to be seen on credit cards, and it's a reward that kicks in only when using PIN authentication.

If there's an opportunity in the gig economy beyond the products Green Dot supports for Uber, it was never part of the company's original plan.

Green Dot was originally a prepaid card marketer focused on teen spending. "That turned out not to be the right use case," said Jeffrey Spicer, Green Dot's chief marketing officer.

But the company did find a market with other demographics, such as people needing prepaid cards for e-commerce or to wall off a section of their budget. Green Dot bought a Utah-based bank in 2012 to allow it to issue its own cards and offer bank accounts, giving it more flexibility in how it designed its products. One example is GoBank, a digital checking account that originally didn't offer checks (Green Dot added the option for checks in mid-2015, two and a half years after GoBank's launch).

"All those use cases came to Green Dot. We didn't seek them out," Spicer said. "You're seeing the same thing now on the B2B side. Uber is one use case that is somewhat unique to Uber, but … there are different verticals that are coming to us with use cases that are specific to them."