When Uils launched in 2021, it was a car rental service for rideshare drivers. But after the founders realized that many rideshare drivers don\u2019t have access to credit, particularly in Latin America, the Buenos Aires-based company pivoted to fintech, offering financial services to drivers through a behavioral scoring engine based entirely on a person\u2019s driving history.<\/p>\n
Rideshare vehicle lending is a crowded market. Both Uber and Lyft host marketplaces where approved vehicle rental companies can show their wares; Uber has piloted a short-term credit program offering up to $500 to drivers. One of the largest ridesharing companies in China, Didi, started offering loans to drivers in 2019. Meanwhile, lenders like Giggle Finance have long extended credit lines for ridesharing vehicle purchases, maintenance and upkeep.<\/span><\/p>\n But Costanzo argues Uils (pronounced \u201cwheels\u201d), which is one of the Battlefield 200 at Disrupt, stands apart in its ability to give a \u201c360-degree\u201d view of drivers in the mobility gig economy. \u201cBeing integrated with all the mobility applications available in Latin America, we have a total vision of the driver\u2019s work activities, being able to determine a credit offer that is more adjusted to reality,\u201d he told in an interview.<\/p>\n To use Uils, drivers download an app, fill out an application, and connect the app to the ridesharing platforms for which they drive via an API (e.g., Uber). Uils analyzes their history using a machine learning model to determine whether they qualify for a \u201cmicro\u201d or consumer loan, considering various factors.<\/p>\n The interest rates range from 0% for the micro loans (for a weekly subscription of $1 to $2) to 145% for the consumer loans. That\u2019s quite a wide range \u2014 and sounds sky-high \u2014 but Costanzo says it\u2019s reflective of the equally high inflation rate in Argentina, the country where Uils first launched.<\/p>\n \u201cThe app has an embedded banking account where drivers collect their earnings from mobility apps,\u201d Costanzo explained. \u201cIn that same account, they receive loan funds and pay their installments every week. We have a collection process that runs every 15 seconds so as soon as the mobility app sends the money, we will collect the pending installments before the driver notices \u2026 The rent-to-own loans are a leasing, so technically we can get the car back as soon as the driver goes into delinquency, therefore there is a tendency to 0% default.\u201d<\/p>\n It\u2019s a relatively new idea in the lending domain, although services that track driver behavior to offer discounts and benefits have been around for some time. For example, Zendrive collects data about driving habits and awards drivers for making safe decisions. Root Insurance calculates car insurance premiums based on driving patterns, and Avinew rewards customers for using autonomous safety features.<\/p>\n But there are obvious surveillance \u2014 and bias \u2014 implications. It\u2019s unlikely every driver would be comfortable with the idea of sharing driving histories with Uils, particularly given that the company uses that data to create a risk profile of them. And where algorithms are involved, there\u2019s always the possibility that flaws in the model could lead some drivers to be treated unfairly or poorly. Consider traffic in a driver\u2019s area that forces them to make frequent, sudden stops that under normal circumstances might be considered reckless.<\/p>\n There\u2019s another risk to consider: the challenge of paying back loans in a downtrending economy, especially as interest rates climb and inflation impacts the price of fuel. An April poll from The Rideshare Guy, a ridesharing blog and forum, found that nearly half of rideshare workers quit or starting driving less that month because of spikes in gas prices.<\/p>\n For its part, Uils says that it requires customers to reauthorize the connections between the app and ridesharing platforms every month, so that tracking doesn\u2019t continue indefinitely. (The company does<\/em> require customers verify their identity to receive loans, however.) Uils is keeping the details of its algorithm close to the chest, save for revealing 70% of users who\u2019ve applied for loans through the platform have received them. The company also isn\u2019t saying exactly how many of those users have failed to make payments, if any.<\/span><\/p>\n \u201cThe scoring engine has more than 200 data points for each driver. We have variables like their work schedule, how many trips per day, how many apps do they use, how many cars they have used, among others,\u201d Costanzo said. \u201cAfter processing the driving history, we will get a score from one to 1,000. Based on our current lending policies, that score will let us know what is the maximum that a driver can receive as a loan.\u201d<\/p>\n After that, Uils has the second layer that\u2019s based on earnings. Depending on how much money the driver makes, they\u2019re able to allocate up to 30% to loan repayment.<\/p>\n But opaqueness aside, Uils\u2019 terms and approach might be less onerous than, for example, those around rentals from Lyft or Uber \u2014 which some drivers say make achieving a profit nearly impossible. A 2019 investigative piece found that Lyft paid drivers participating in its Express Drive rental program less per mile than drivers who used cars leased through dealerships. The program imposed restrictions on drivers as well, prohibiting them from making money using their vehicles to work for other services.<\/p>\n Costanzo stresses, again, that these are drivers without access to traditional credit \u2014 making their financial situations particularly precarious.<\/p>\n \u201cThe biggest competitive advantage is that we apply a matching fund strategy around the installments amount,\u201d Costanzo said. \u201cDrivers will pay the same amount that he pays to rent the car in the informal market, offering a frictionless solution. On top of that, we are the only fintech in Latin America that offers major consumer loans and rent-to-own loans without consulting credit bureaus or asking for a credit card or any other guarantees.\u201d<\/p>\n Image Credits:<\/strong> Uils<\/p>\n<\/div>\n Uils is currently raising its second round funding round \u2014 totaling $1 million \u2014 through a simple agreement for future equity (SAFE), which grants the investors the right to purchase equity in the company at a future date. It values the startup at $7.5 million post-money; founder and CEO Tom\u00e1s Costanzo says that the new capital will be put toward general \u201cgrowth and development,\u201d including expanding Uils\u2019 headcount.<\/p>\n \u201cWe raised $275,000 in our pre-seed round and used those funds to build and launch our product \u2014 a mobile wallet and scoring engine \u2014 for 12 months,\u201d he said. \u201cNow, we are expecting this round to help us achieve 24-month additional runway to evolve our scoring engine, develop new features and expand in Latin America \u2014 specifically Mexico, Chile and Colombia.\u201d<\/p>\n In the coming months, Uils plans to launch insurance coverage and a buy now, pay later (BNPL) solution \u2014 angling to nab a larger slice of the ridesharing fintech market. Regulatory scrutiny could be coming if the BNPL industry\u2019s trajectory in the U.S. is any indication. But for now, Uils is stands to benefit from the relative dearth of direct competition.<\/p>\n \u201cDelivering a solid value proposal and lowering risk through alternative data models will become a requirement to be different in a very competitive market,\u201d Costanzo said. \u201cHigh-growth models have been replaced with retention ones \u2026 The current circumstances will promote efficiency over growth.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" When Uils launched in 2021, it was a car rental service for rideshare drivers. But after the founders realized that many rideshare drivers don\u2019t have access to credit, particularly in Latin America, the Buenos Aires-based company pivoted to fintech, offering financial services to drivers through a behavioral scoring engine based entirely on a person\u2019s driving […]<\/p>\n","protected":false},"author":1,"featured_media":1230302,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[],"class_list":["post-1230300","post","type-post","status-publish","format-standard","has-post-thumbnail","category-celebrity-gossip"],"_links":{"self":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1230300","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/comments?post=1230300"}],"version-history":[{"count":0,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1230300\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/media?parent=1230300"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/categories?post=1230300"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/tags?post=1230300"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Uils\"](\"https:\/\/www.ghanamma.com\/gp\/wp-content\/uploads\/2022\/10\/6192f005272796033008a26a_Uils_mock_3.png\")
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