For consumers who are savvy and shop around, the latest from SocietyOne (P2P Lender) shows that disruption is here to stay.
Sharing economy behemoth Uber is partnering with Australia's leading peer-to-peer lender SocietyOne to provide existing and potential drivers with loans to buy new cars, as the car-booking company looks to ramp up its workforce to put further pressure on the taxi industry. The deal will provide SocietyOne, which is backed by media moguls James Packer, Lachlan Murdoch and Ryan Stokes, with access to a potentially high-growth market for lending – Uber drivers – and shows how nimble, fintech start-ups can win niche business in the digital economy from incumbent banks. In the past 18 months, the number of drivers on the UberX platform in Australia has gone from zero to 20,000. Uber Australia's CEO David Rohrsheim says the partnership with SocietyOne "will help grow the business faster, there is no doubt about it". The deal could herald a new era of car ownership, where drivers could work casually for Uber to pay for a new vehicle, Mr Rohrsheim suggested. "You have SocietyOne coming in to the market saying if you drive one night a week and cover all your payments through Uber, you can now own a car." As the Turnbull government prepares to release its innovation statement on Monday, SocietyOne chief executive Matt Symons said the Uber deal is a concrete example of a local start-up forging a relationship with one of the biggest global tech players. "This is a very exciting, innovative partnership and is an example of the sorts of strategic partnerships we want to forge to bring our disruptive finance proposition to many more Australians over the coming years," he said. "This is a validation of small, fast-growth tech companies punching above their weight." SocietyOne, which has 75 staff in Australia and New Zealand, is receiving around $80 million of applications for personal loans each month but only places a small proportion of those on its platform in order to maintain credit quality for its investors. It has matched around $60 million this year, with origination growing at 10 per cent a month. It expects to open the platform to retail investors next year. SocietyOne has pioneered "risk-based pricing" for personal loans in Australia, meaning interest rates are determined after a detailed assessment of a borrower's individual circumstances. Interest rates for Uber drivers will depend on their overall credit quality but Mr Symons said good borrowers should expect to borrow at lower rates than offered by banks. According to website comparison site RateCity, SocietyOne offers secured car loans from 6.45 per cent, undercutting the best rate from the big four banks by more than 1 percentage point.