Uber to let NY riders pay with pre-tax dollars
Uber has announced plans to allow UberPOOL users to pay for rides using pre-tax dollars via a partnership with consumer benefit platform WageWorks. WageWorks runs a programme allowing commuters to use pre-tax earnings to pay for eligible commuting expenses. Traditionally these expenses have covered buses and trains, however UberPOOL will be included as of this week. The service, which Uber refers to as a “first-of-a-kind partnership,” is only open in New York for now, but the company says it plans to roll it out across the US in the future. “By making it easier and more affordable to carpool, we’re working toward our goal of getting more people in fewer cars,” the company explained in a blog post.

Uber customers in New York can now pay for rides with pre-tax commuter money.

Uber customers in New York can now pay for rides with pre-tax commuter money. Credit: Getty Images/iStockphoto

Uber is getting into pre-tax money.

Customers can now use their commuter dollars (which aren't subject to taxes) to pay for certain Uber rides. Uber announced the policy in an email to New York users Tuesday morning.

The move into commuter benefits is through a partnership with WageWorks(opens in a new tab), a popular national employee benefits platform.

It's a small but important step as Uber looks to make itself more than a ride-hailing service by engraining itself in everyday life. The company has been slowly introducing various new features to attract commuters, including passes for unlimited rush-hour use(opens in a new tab).

The benefits will only be available for rides through UberPool, the shared ride system that has grown as a commuter option. For now, the option is only available in New York, but could eventually roll out to the other US cities that offer UberPool.

Commuter benefits, where a certain amount of an employee's pre-tax salary goes into a separate account each month, are traditionally offered by employers to offset the costs of trains, buses and other public transit. The accounts are linked to prepaid debit cards that only work for certain transit vendors. Employees have not in the past been able to use these benefits for private transit options.

To qualify UberPool for commuter benefits, which are regulated by the IRS, customers using commuter benefits cards will always be placed in UberPool vehicles that seat six or more people. In a frequently-asked-questions section of its announcement, Uber defined commuter benefits as benefits programs for public transportation, including "trains, subways, busses, ferries, or certain vanpools of six or more passengers."

An Uber spokeswoman said vehicles likely wouldn't pick up the full six passengers at a time, but would just be equipped to seat six.

Uber also said in a blog post(opens in a new tab) that wait times could be longer for commuting customers.

WageWorks approached Uber about the partnership idea, WageWorks President for Commuter Services Dan Neuburger told Mashable. The benefits company already partners in a less public way with other ride-sharing companies, Neuburger said, though he declined to name which ones.

"With the advent of ridesharing, it's still very new for everybody, particularly for the IRS, which has not officially weighed in," Neuburger said. "We at WageWorks are confident UberPool is compliant."

Uber already offers $5 flat commuter rates in several cities during peak morning and evening hours, but those rates have not been eligible for any sort of commuter benefit. People using commuter benefits can use them for the $5 flat trips, but can also use them for more expensive UberPool rides at other times of day.

To use their pre-tax money, Uber users will need to add a commuter benefits prepaid card to their payment options. To use that card for a trip, instead of a standard credit card, customers will have to change the payment option for that particular trip.

The eligible cards are WageWorks commuter prepaid MasterCards, Wageworks prepaid Visa commuter cards and TransitCheck QuickPay prepaid Visa cards. Other sources of commuter benefits are not eligible.

Uber and WageWorks said in blog(opens in a new tab) posts(opens in a new tab) announcing their partnership that riders can save up to 40 percent by using commuter benefits. The federal $255 monthly transit limit will apply to commuter rides as it does to all other transit.

“This partnership will make our riders’ commutes easier by allowing them to use pre-tax benefits to pay for their uberPOOL commute. This furthers our goal of getting more people in fewer cars, while making New Yorkers’ daily commute more affordable and more efficient,” Josh Mohrer, General Manager of Uber New York, said in a statement.