By
Steve Muchoki
February 9th, 2024
The partnership with Uber comes as Stripe started experiencing slower growth.
Financial services company Stripe and technology company Uber (NYSE: UBER) have entered into an expanded global partnership that gives Uber users more flexible means to pay for services. As customers have more access to pay for their Uber Rides and Uber Eats, the collaboration will also help Uber lower payment costs. As the news of the strategic payments partnership with Stripe hit the market on Wednesday, shares of Uber jumped more than 4% before closing up 3.61%.
Uber has been on the rise since the start of the year, pushing forward its winning streak from the past year. The company has increased almost 35% in the last twelve months and surged about 53% since January. In the last three months, the ride-hailing service provider has grown 20.17% and advanced 21.59% over the past month. UBER has gained 28.49% in the last five days.
Stripe and Uber Partner on Better Payments Performance
According to Stripe, the deal allows Uber to stretch the use of its payments platform on selected services in eight of Uber’s biggest markets. This service will expand to the US, Japan, Australia, Canada, etc. Meanwhile, Uber’s major rival in the US, Lyft (NASDAQ: LYFT), has been a longtime partner of Lyft. In addition to Lyft using the financial services company to power payments at scale, the mobility service provider partnered with Stripe to develop Express Pay. This unique feature allows drivers to cash out instantly whenever they desire. The relationship between Lyft and Stripe has made many believe that the payment platform will never accommodate Uber. As it stands, Lyft will continue to remain a customer of the financial service company as Uber comes on board.
Notably, the partnership with Uber comes as Stripe started experiencing slower growth. Although the company did not explicitly note the decline, it was evident in the annual update published on April 5. Although the figures were impressive, they were lower than the previous year. While the transaction volumes in 2022 went up 26%, the same was up 60% in the previous year. The same goes for the addition of 1,000 new companies every day, compared to 1,400 daily in the previous year. Also, Stripe confirmed that there was a wide gap:
“This is a significant deceleration from the breakneck growth that we saw during 2020 and 2021. At the same time, we are confident as ever in the internet economy’s long-term prospects, and we’re heartened by the steady advancement of the millions of businesses we serve in the face of banking crises, war, pestilence, energy shocks, supply chain issues, inflation, and broader volatility.”
In addition, Stripe secured $6.5 billion in March to reach a valuation of $50 billion. This is a major step down from the $95 billion valuation in 2021.