Grubhub adds instant pay option for delivery drivers

Dive Brief:

Grubhub has launched a new feature, called Instant Cashout via Direct to Debit, that allows its drivers to access their earnings immediately. The offering is enabled by Paypal’s payout 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 pay in a safe, reliable way, Grubhub Product Manager Mrugesh Bavda said in a statement.
This pay option, which will be available to drivers this month, builds on Grubhub’s recent per-mile driver pay increase to help offset high fuel costs and retain drivers.

Dive Insight:

Instant and flexible pay options may provide a competitive advantage as both restaurants and delivery companies face employee shortages that have hurt business. The flexibility of gig work is attracting drivers to ride-sharing platforms over pizza delivery jobs, with 44% of drivers citing that they prefer working for firms like Uber than payroll positions for restaurants, per BTIG data.

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

More than 60% of drivers use Instant Cashout and do so three times per week on average, the company said. Instant Cashout 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 offering appears to be in line with worker interests. Eighty percent of workers prefer to have their pay automatically deposited as they earn it, according to a recent study from Ceridian conducted by The Harris Poll. Seventy-eight percent of respondents said free access to on-demand pay would increase their loyalty to an employer.

Instant Cashout via Direct to Debit’s model isn’t especially unique, however. Both Domino’s Pizza and Pizza Hut have added same-day pay options, for instance. Grubhub’s offering does appear to be slightly more competitive than rival aggregators features, however. Uber offers Instant Pay for 50 cents per cashout for non-Uber cards, and DoorDash offers Fast Pay for a $1.99 fee, but prepaid cards are not eligible.