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Five-way venture, including Uber Freight, looks to pay drivers in two hours

LightningPay product gets hearing in front of fintech experts at key industry conference

ATLANTA — A joint initiative among five separate companies, including Uber Freight, to pay drivers as fast as two hours after receiving documentation is several months old, but some of its participants laid out the specifics to an audience of fintech professionals at a key conference.

What Uber Freight (NYSE: UBER) is calling LightningPay was announced in October. Since the scheduled representative from Uber Freight was not able to join the panel at the Mobile Payments Conference at the Westin Atlanta Perimeter North hotel due to illness, panelists from one company with a well-known name — Mastercard — and one rising star in the payments ecosystem — Branch — were tasked with explaining their product that, if successful, could put a serious dent in factoring. 

Atif Siddiqi, the founder and CEO of Branch, was joined by Luis Silva, the vice president of digital partnerships with Mastercard, on the panel. But LightningPay is actually a project of five total players. Joining Branch, Mastercard and Uber Freight, Marqeta is a payments platform that already had been partnering with Uber Freight on fuel payments to drivers, and Evolve Bank & Trust, which provides the cash for the rapid payments. (In its announcement of the initiative last fall, Marqeta described its role as the “card-issuing platform.”)

Branch’s role, according to Siddiqi, is primarily as the software provider to LightningPay but also the administrator of “digital wallets,” where Uber Freight drivers would have their payments deposited.

Uber Freight, in its own online information about LightningPay, doesn’t just say it pays in two hours. The offering receives the capital-letters treatment and is dubbed “2-Hour Settlements.”

Siddiqi told the audience that most drivers now are paid on a 30- or 60-day basis, though it was noted to him that it is likely the vast majority of drivers are factoring to be paid faster than that but take a “haircut” in a reduced payout. On its website, Uber Freight said it now pays a driver’s factoring company in 30 days, so the driver is paid faster by the factoring company, with that company then assuming the extra wait time. But it also said users of its current QuickPay program are paid in seven days or less.

Siddiqi said factoring “has its role in the ecosystem,” but he then offered a combination of criticism of factoring and praise for LightningPay. “What we’ve looked at is how do you create this very frictionless experience for owner-operators so they can get started from day one,” Siddiqi said.

Factoring, Siddiqi added, has “a lot of delays in submitting paperwork, a lot of delays around the underwriting.” He also was critical of factoring relationships that tie a driver to a certain factoring company for a designated period. 

“These are some of the things that differentiate us from factoring,” Siddiqi said.

The marketing of LightningPay includes a section of the Uber Freight app with a link that takes the user directly to Branch, Siddiqi said. 

Asked how any of the partners in the initiative get paid, given there are no fees extracted from the payments going to drivers, Siddiqi said exchange fees, paid by the merchants where the Uber Freight/Mastercard card is swiped, provides a revenue stream for LightningPay.

With no Uber Freight representative able to attend the conference, describing its interest in the initiative was necessarily second hand. But Siddiqi said none of the exchange fees collected from merchants are distributed to Uber Freight. Its interest is in making its digital brokerage offering more attractive than the competition.

“(Uber Freight) comes out and says to new operators, here is our new value proposition,” Siddiqi said.

While no specific figures were given on the number of carriers that Uber Freight has signed up for LightningPay, Siddiqi did say that within several months of joining the program, drivers using the product were taking 30% more loads than before.

“They are more productive if they know they are getting their money today,” he said. 

While the LightningPay offering on its surface looks like it could damage factoring, the latter industry is attracting new entrants. Beyond the acquisition pulled off last year by Triumph Bancorp in buying HubTran (NASDAQ: TBK), and some belief that it is ripe for consolidation (in part to take on the behemoth of Triumph), factoring is seen as enough of an opportunity that just last week a group of factoring executives launched a new factoring company called Transcap.

L to R: John Kingston, FreightWaves; Atif Siddiqi, Branch; Luis Silva, MasterCard

LightningPay’s focus so far has been on single owner-operators, according to Siddiqi. But Branch and the other partners are now studying how it can be expanded to smaller fleets, which he defined as five to 20 trucks.

“Their needs might be different,” said Siddiqi, noting that tailoring the suite of products to smaller fleets will need to be developed.

Mastercard’s role is not just to brand the card that Uber Freight users will be using. (The digital wallet is administered by Branch, with funds paid into it coming from Evolve Bank.)

For example, Silva said Mastercard’s current fuel card with Uber Freight can be activated using biometrics at the pump, eliminating the need for a driver to have to go into the store for approval. That sort of technology can also be brought to the LightningPay product, “and that differentiates value,” Silva said.

Discounts from using the Uber Freight card are available at Love’s, with other outlets possibly being added in the future, according to an Uber Freight summary of its card offerings including LightningPay.

Editor’s note: John Kingston, the author of this article, moderated the panel.

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One Comment

  1. My name is Thad Cummins and I’ve been trying to get back in the drivers seat since Dec. 2020, when I failed a drug test for a company because some kid that ran into me one night at a bar decided to seek revenge from a prior situation (April 2020) of me supposedly stealing his girlfriend, he decided to put meth in my drink to keep me from passing my drug test. So in Dec. Of 2020, during my (11 week ) ICCC truck driving class was on its way, i was required to do a return to duty. Which i completed at Ft. Dodge, Iowa family resource center. Which i paid alot of money for and i did 8 classes for and 5 drug tests for and completed the return to duty process and was able to Graduate from the truck driving coarse at the top of my class. Well after the paid state employee from ft.dodge family resource center told me that i could return to class and finish the trucking coarse and that she would take care of getting me back into the publishers clearinghouse so i could return to duty. So that was the last time i heard from her. I went out and found a job driving for Turbo transportation out of thor, Ia and i was loving it, good money and i was gone monday through friday home on the weekends. Well then Aug. 2021 i get pulled over in Owatonna minnesota for a 3 level diesel check and the state trooper comes back and tells me thad i got to shut you down because I’m still out of service. My return to duty wasn’t token care of. So the women from the family resource center never even tried to put me back in the clearinghouse. So i and the head of ICCC truck drivers transportation coarse believed i could now drive a truck, having know idea that i still was out of service, so i lost my job and was back to spuare one. She didn’t bother to call and tell me or anyone that she couldn’t do it. So because of her choice it ruined my life. So i had to do the return to duty process all over again except this time it cost me an extra $500 for a SAP guy and a hole new evaluation and classes agian. Which i took 3 more drug tested and finished the return to duty process again. Thats 2 return to duties in-less than a year and next company i get hired for also fails to get me put back in the publishers clearinghouse. He starts to put me back in but never finished it. So for the 2 months i drove for him, i was still out of service. So my life has just been crap because of all this and my wife is ready to leave me and divorce me because i can’t help contribute to our lives. Its not fair that people can destroy other peoples lives and get away with it and still get to keep there state job and his trucking company career while mine gets flushed down the toilet even though i did every thing i was told to do by the book twice and i get punished for it. I love to drive the big rigs so if u know of anyone that can help me with my situation, it would be helpful. I think because of the circumstances , the Publishers clearinghouse should look at all the evidence and wipe my slate clean and allow me to return to the trucking industry with a clean slate since, i did do 2 return to duty processes (steps 1 – 4 ) of 6) and passed 7 drug tests. If there’s anything u can do please help me… thank you.

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.