Articles · Lenders and fintech
Reported article
Uber Built Its Drivers a PPP Door. It Opened Onto Kabbage.
Of all the gig platforms, one built a lending partnership to get its workers a PPP loan. The fintech on the other side of that partnership is the one whose loan book ended up in bankruptcy court.
Most of what the gig platforms called "relief" was not a loan and did not come from a lender. It was company cash gated to a positive COVID test, or a help-center page pointing drivers at the government. Lyft wrote a guide. Instacart said it would pay up to 14 days of sick pay. Postmates ran a medical-cost fund. None of them put a driver in front of a loan officer.
DoorDash came closest, and it helped restaurants: it partnered with the fintech BlueVine to run PPP applications for its restaurant partners, nearly 200 of them by DoorDash's count, and not for its Dashers. Its Kiva loans and Hello Alice grants were also for restaurants. "Main Street Strong," which gets cited as gig-worker relief, was a restaurant program. The couriers got a hardship fund that paid cash.
That leaves one platform that built a loan application for the workers themselves.
The door
On June 16, 2020, Uber and Kabbage launched a PPP application for drivers and delivery people, "a totally separate path that's purpose-built for Uber drivers," as Kabbage's chief executive, Rob Frohwein, put it to Fortune. Uber's earnings data flowed into the form; Kabbage said that "over 90 percent of all approved independent contractors that applied through Kabbage had an automated experience" and that applicants "may receive SBA approval the same day they apply." For a workforce of one-person businesses with no bookkeeper and no banker, this was useful: the platform that held the driver's income data used it to fill out the loan.
There was also an interested party in the room. As Fortune noted at the time, a wave of drivers taking "small-business" loans was helpful to Uber's other argument, that drivers are independent entrepreneurs rather than employees. The loan application and the classification fight pushed the same way. A driver who files a Schedule C and takes a PPP loan has, on paper, agreed he runs a business.
Where the door led
American Express acquired Kabbage's technology and part of its team in 2020, as Banking Dive reported. The PPP loan book stayed behind in a servicer that became KServicing, which filed for bankruptcy. In the bankruptcy it agreed to resolve Justice Department False Claims Act allegations about how it processed PPP loans by giving the government an allowed unsecured claim of up to $120 million; the amount recovered depends on the estate. Kabbage co-founder Rob Frohwein, who ran the PPP operation, is a defendant in the $533 million clawback complaint the company's wind-down estate later brought. And when NPR went looking for the borrowers behind the bulk of unforgiven PPP loans (NPR, "The majority of unforgiven PPP loans belong to one-person businesses," Oct. 13, 2022), it found one-person businesses, and named Uber drivers among them.
How many of those loans went to Uber drivers cannot be told from the record. KServicing's first-day bankruptcy declaration breaks the $7 billion book down only by which bank funded each tranche (the PPP Liquidity Facility, Customers Bank, Cross River), never by who borrowed. The words "Uber," "rideshare," "gig," and "driver" appear zero times in its 52 pages.
The one platform that built its drivers a loan application built it onto the fintech whose $7 billion book went through bankruptcy and a $120 million False Claims Act resolution.
The door nobody had to build
Most gig workers didn't need a platform partnership to find PPP, because the PPP fintechs came looking for them.
Womply marketed PPP straight at drivers, by name. Its blog told 1099 earners they "likely qualify for a forgivable PPP loan" and listed the platforms — Uber, DoorDash, Postmates, Lyft drivers (Womply blog, "If you have 1099 income, you likely qualify for a forgivable PPP loan") — then routed them through its Fast Lane. Womply's own blog calls it "not a PPP lender … an agent to various PPP lenders." At least one delivery-driver site, EntreCourier, published a paid-referral Fast Lane walkthrough naming nine apps and disclosing the relationship. Blueacorn's Facebook ads ran the same play for "1099 & Self-Employed."
The same worker shows up at three counters: the self-employed gig driver was one of the customers the 2021 sole-proprietor surge was built on. The platforms spent to keep him a contractor. The fintech aggregators found him because he was a contractor. Uber and Kabbage just formalized into one in-app button what Womply was doing at scale to the entire Schedule-C population. Same worker, three business models, one small forgivable loan.
Uber×Kabbage: Kabbage release and Fortune (June 16, 2020). DoorDash×BlueVine and Main Street Strong: DoorDash newsroom. KServicing: Banking Dive, the Justice Department settlement release and the KServicing bankruptcy docket. Womply, EntreCourier and Blueacorn gig targeting: company and publisher pages. Rideshare PPP demand: the companion analysis "PPP Found the Drivers."