Uber has struck a new deal to facilitate the way that its contracted drivers pay for fuel, and according to reports, the partnership could be highly beneficial to both sides.
Reports in Investor’s Business Daily on Thursday (Aug. 20) said analysts will be keeping a close watch on Uber’s new partnership with FleetCor Technologies, which provides fuel cards and fleet payment services for both the government and commercial sector. Existing clients include Chevron, BP and Royal Dutch Shell.
But its new deal with Uber Technologies, first announced in June, could pull FleetCor stock up in a big way, reports said. Uber drivers can access discounts at the gas station, and the deal will allow Uber to automate fuel purchases from its weekly earnings data.
Analysts reportedly already have an optimistic view of the fleet card company. The company beat expectations in Q2 2015 in both sales and earnings, and the corporation soon thereafter raised its guidance.
Now, reports said, analysts are anticipating a 21 percent increase in earnings and a 17 percent gain for 2016. Reports said an upcoming stock bump for FleetCor could be the result of a partnership with a high-profile, consumer-facing company such as Uber.
Separate reports from the publication said FleetCor processed more than 652 million transactions in 2014.
“Uber and FleetCor have developed a first-of-its-kind offering for driver-partners enabling them to gain instant savings at gas stations worldwide,” said Uber VP of Strategic Initiatives David Richter when the partnership was announced. “Now, driver-partners will have access to a variety of discounts applied automatically with every transaction.”
Analysts expect the fleet card industry to hit a $35 billion valuation by 2019, but the companies that are able to maintain profits despite fluctuations in gas prices are most suited to succeed. According to Investor’s Business Daily, just 13 percent of FleetCor’s business is impacted directly by gas prices — compared with an estimated 30 percent of rival Wex’s operations.