Grubhub adds instant payment option for delivery drivers

Diving brief:

  • Grubhub launched a new featurecalled Instant Cashout via Direct to Debit, which gives its drivers immediate access to their earnings. The offer is enabled by Paypal’s payment management platform, Hyperwallet, which then uses Visa Direct to deposit the funds to a bank debit card.
  • Instant Cashout is designed to give drivers more flexibility when it comes to accessing their payment securely and reliably, Grubhub Product Manager Mugesh Bavaria said in a statement.
  • This payment option, which will be available to drivers this month, is based on by Grubhub recent increase in driver pay per kilometer to help offset high fuel costs and retain drivers.

Overview of the dive:

Instant and flexible payment options can provide a competitive advantage as restaurants and delivery companies face shortages of employees who have hurt business. The flexibility of on-demand work attracts drivers to carpooling platforms over pizza delivery jobs, with 44% of drivers citing they’d rather work for companies like Uber than restaurant payrolls, according to BTIG data.

The previously introduced delivery platform Instant collection with Chase in 2019, which allowed drivers to cash out their winnings directly into their bank accounts. Drivers are allowed to withdraw up to $500 per day for a fee of 50 cents per transaction.

More than 60% of drivers use Instant Cashout and do so an average of three times a week, the company said. Instant withdrawal via Direct to Debit is a bit different, as it allows Grubhub drivers with an eligible bank debit card to deposit their accrued earnings to their eligible debit or prepaid card.

This offer seems to correspond to the interests of the workers. Eighty percent of workers prefer their wages to be deposited automatically as they earn them, according to a recent Ceridian study produced by The Harris Poll. Seventy-eight percent of respondents said free access to on-demand pay would increase their loyalty to an employer.

Instantaneous Collection via Direct to Debit’s pattern isn’t particularly unique, however. Both Dominos Pizza and Pizza Hut have added same-day checkout options, for example. Grubhub’s offering, however, seems slightly more competitive than the features of competing aggregators. Uber offers instant payment for 50 cents per payment for non-Uber cards, and DoorDash offers Fast Pay for a fee of $1.99but prepaid cards are not eligible.

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