Uils wants to lend LatAm’s rideshare drivers cash based on their driving record • TechCrunch

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When oil Launched in 2021, it was a car rental service for shared trip drivers. But after the founders realized that many taxi drivers did not have access to credit, particularly in Latin America, the Buenos Aires-based company turned to fintech, providing financial services to drivers through a fully-based behavioral assessment engine. The person’s driving history.

Rideshare vehicle lending is a crowded market. Host markets for both Uber and Lyft where approved car rental companies can show off their wares; Own an Uber workout A short-term credit program offering up to $500 to drivers. Didi, one of the largest mass transit companies in China, started providing loans to drivers in 2019. Meanwhile, lGiggle Finance has long-running lines of credit for vehicle purchase, maintenance, and vehicle purchase sharing.

But Costanzo argues that Uils (pronounced “wheels”), one of the Battlefield 200 at TechCrunch Disrupt, stands out for its ability to offer drivers a “360-degree” view of the gig economy. “By integrating all the mobility applications available in Latin America, we have a complete view of the driver’s business activities, and the ability to define a credit offer that is more in line with reality,” he told TechCrunch in an interview.

To use Uils, drivers download an app, fill out an app, and connect the app to the ridesharing platforms they drive for via an API (such as Uber). Uils analyze their history using a machine learning model to determine if they qualify for a “small” loan or a consumer loan, taking into account various factors.

Interest rates range from 0% for small loans (for a weekly subscription from $1 to $2) to 145% for consumer loans. That’s a very wide range – and it sounds very high – but Costanzo says it reflects the equally high rate of inflation in Argentina, the country where Uils was first launched.

“The app has a built-in bank account where drivers collect their earnings from mobility apps,” Costanzo explained. “In the same account, they receive loan money and pay their installments every week. We have a collection process that takes place every 15 seconds, and as soon as the navigation app sends the money, we will collect the outstanding installments before notifying the driver… Rent-to-own loans are a rental, so we can technically get On the car again once the driver is behind on the payment, so there is a tendency to default at 0%.”

It’s a relatively new idea in the lending space, although services that track driver behavior to offer discounts and benefits have been around for some time. for example, Zandrif It collects data about driving habits and rewards drivers for making safe decisions. root lock Calculates car insurance premiums based on driving patterns, and Avinew rewards customers for using autonomous safety features.

But there are clear ramifications of surveillance — and bias. It’s unlikely every driver would be comfortable with the idea of ​​sharing their driving history with Uils, especially given that the company uses this data to create a risk profile for them. And where algorithms are included, there is always the possibility that flaws in the model will cause some drivers to be treated unfairly or poorly. Consider traffic in the driver’s area that forces them to make frequent, sudden stops that would, under normal circumstances, be reckless.

There is another risk to consider: the challenge of repaying loans in a bearish economy, especially with rising interest rates and inflation affecting the price of fuel. April vote From The Rideshare Guy, a ride-sharing blog and forum, I found that nearly half of ride-sharing workers quit or started driving for less that month due to higher fuel prices.

Image credits: oil

For its part, Uils says it asks customers to reauthorize connections between the app and ride-sharing platforms every month, so that tracking doesn’t continue indefinitely. (company Do Customers are required to prove their identity to receive loans, however). Uils keeps details of its algorithm close to the box, except for revealing that 70% of users who applied for loans through the platform have taken it. The company also does not state how many, if any, such users have failed to make payments.

“The log engine contains more than 200 data points for each driver. We have variables such as their work schedule, the number of trips per day, the number of applications they use, the number of cars they have used, among other things,” Costanzo said. We will get a score from one to 1000. Based on our current lending policies, this score will allow us to know the maximum that a driver can receive as a loan.”

Next, Uils have a second tier which is based on earnings. Depending on how much money the driver makes, they can allocate up to 30% to repay the loan.

But ambiguity aside, Uils’ terms and approach may be less difficult than those of rentals from, say, Lyft or Uber, which some drivers say makes profiting nearly impossible. Achievement of the year 2019 Piece I discovered that Lyft paid drivers participating in the Express Drive rental program less per mile than drivers who used cars rented through dealerships. The program also placed restrictions on drivers, preventing them from making money from using their cars to work on other services.

Costanzo emphasizes, once again, that these are motivated people who do not have access to conventional credit – which makes their financial situations especially precarious.

“The biggest competitive advantage is that we have a matching fund strategy around the premium amount,” Costanzo said. “Drivers will pay the same amount as they would for renting a car in the informal market, offering a frictionless solution. Moreover, we are the only financial technology in Latin America that offers large consumer loans and rent-to-own loans without consulting credit bureaus, requesting a credit card or any collateral. other”.

oil

Image credits: oil

Uils is currently raising its second round of funding — totaling $1 million — through a Simple Agreement for Stock Futures (SAFE), which gives investors the right to purchase shares in the company at a later date. The startup is valued at $7.5 million after the money; Founder and CEO, Thomas Costanzo, says the new capital will be directed toward “growth and development” overall, including increasing Uils headcount.

“We raised $275,000 in the pre-incorporation round and used that money to build and launch our product — a mobile wallet and scoring engine — for 12 months,” he said. “Now, we expect this round will help us achieve an additional 24 months runway to develop our recording engine, develop new features and expand into Latin America – specifically Mexico, Chile and Colombia.”

In the coming months, Uils plans to launch insurance coverage and buy now, pay later (BNPL) solutions – seeking to capture a larger segment of the fintech market. Regulatory scrutiny can come if the trajectory of the US BNPL industry is the same indication. But for now, Uils will benefit from the relative scarcity of direct competition.

“Delivering a strong value proposition and minimizing risk through alternative data models will become a different requirement in a highly competitive market,” Costanzo said. “High growth models have been replaced by retention models…the current conditions will boost efficiency over growth.”

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