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Uber picks up PayPal to drive member numbers

PayPal's network could come in handy where credit cards are rare or other payment systems are unreliable -- and thus help Uber in its quest for global expansion.

Donna Tam Staff Writer / News
Donna Tam covers Amazon and other fun stuff for CNET News. She is a San Francisco native who enjoys feasting, merrymaking, checking her Gmail and reading her Kindle.
Donna Tam
3 min read
PayPal CEO David Marcus (right) holds the door open for Uber CEO Travis Kalanick as the pair get ready to demo Uber's new PayPal integration. PayPal/Uber

Uber users can now pay for on-demand car service with PayPal, kicking off a partnership that lends PayPal some mobile cred while potentially driving new users to Uber's services.

Uber is releasing new versions of its Android and iOS app Monday night in France, Germany, Italy, the Netherlands, and the US. Both apps will have PayPal built in as a new form of payment. To promote the partnership, the companies are giving Uber users $15 off rides paid for with PayPal until November 28.

While it may seem like a small change for US users -- Uber currently takes credit cards and Google Wallet -- the integration will help Uber in its quest for global expansion, according to Uber CEO Travis Kalanick.

Uber's new PayPal integration. PayPal

"We are rolling out all over the world. We need to address the way people pay in different places," he told CNET while sitting in the back of a Mercedes Benz S-class SUV driven by PayPal CEO David Marcus. Yes, the CEO of PayPal drove Kalanick around all day Monday, in San Francisco traffic, to demo the new app for journalists.

Call it a sign of commitment. PayPal has been working hard to form partnerships with retail and food merchantsin order to make its app, PayPal Mobile, ubiquitous. It doesn't want to skip transportation.

"You can do all these things now without a wallet, but transportation is key because obviously this is something that you do all the time," Marcus said from the driver's seat. "Uber is the best experience you can do out there and it was really important for us to expand the PayPal network to all those experiences."

PayPal's network comes in handy in places where credit cards are not prevalent, or there isn't a reliable payment system, Kalanick said. These are places where PayPal, which takes payments directly from bank accounts or through BillMeLater in addition to credit cards, can reach. In Germany, were people have only recently started warming up to using credit cards, Uber can take advantage of marketing itself to PayPal's "tens of millions" of users. The same goes for a city like Tokyo where Uber officially launched its service last week, or Moscow, where the company plans to have a soft launch later this week.

Although Uber already has a credit card alternative in Google Wallet, Kalanick said it's not enough.

"The difficulty is we needed to make sure this works everywhere," Kalanick said. "We wanted to work with one that had a real wide distribution. Google Wallet is about Android more than anything else -- a partnership to get people really excited about the Android side of things. This is Android and iOS, and this is global."

For now, Uber users can only pay fares with the new PayPal integration, but in the future, Uber wants to incorporate more of PayPal's features, like checking an account's balance through the Uber app.

And, while Uber gets a new way to collect fares and the backing of the eBay-owned payments leader, PayPal gets Uber -- really, one of the hottest mobile apps in Silicon Valley at the moment -- to promote its new mobile software development kit, or SDK.

The developer tools, which go live for any third-party developers early next year, let developers add PayPal's payment option directly into their apps. This means users won't have to leave an app to pay with PayPal, generally creating a more fluid experience.