For many gig economy workers, retirement can seem like an elusive goal. Their income is constantly in flux, and they receive none of the 401(k) benefits available to full-time employees, like matching contributions. A new partnership between Uber and Betterment, a wealth management startup, underscores the shortcomings of the gig model. Through the deal, Betterment will offer its financial planning technology to Uber drivers without charge for one year.
"We want to bring world-class personal finance and investment management services to investors of all types," says Betterment CEO Eli Broverman. Through the Uber app, drivers will be able to set financial goals and contribute to an IRA or another retirement account. But Uber will contribute nothing to those savings—the transportation company is not even reimbursing Betterment for the annual fee it has agreed to waive for drivers (worth approximately $156, depending on the account balance).
In parallel, Broverman continues to grow Betterment for Business, a 401(k) solution designed for full-time employees. Last month the startup reached over $5 billion in assets under management, the first independent robo-advisor to hit that milestone.
As for the Uber partnership, drivers in Boston, Chicago, New Jersey, and Seattle will be able to access Betterment starting today, with plans to expand the program nationwide later this year. Uber selected Betterment after quietly putting out the word that they were seeking a financial planning partner.
[Screenshot: courtesy of Uber] AOC