Diversification is rife within the alternative finance space. A wide, weird and wonderful range of niches continue to be disrupted by the various platforms.
The latest innovation comes in the form of CommuterClub – a UK startup that has already secured $1m in angel backing. The platform aims to make the benefits of purchasing annual season tickets for London trains widely accessible. Locking oneself into an annual season ticket can markedly reduce the average cost of the daily commute – but it is a luxury that not everybody can afford. Many companies in big cities offer their employees interest-free annual ticket loans – but smaller companies, sole traders, freelancers and the like do not have such a scheme on offer.
This is where CommuterClub comes in. The site offers its users a 5.6% annual loan – facilitated by leading consumer lender RateSetter – which is spread over 11 monthly payments. CommuterClub’s remit is currently limited to the area covered by Transport for London’s Oyster card – but it has designs to branch out to other UK cities in time.
Although not as alluring as the interest-free deals offered by some larger firms to their employees, CommuterClub will provide substantial savings on pay-as-you-go fares as well as on weekly and monthly passes. The site will essentially enable users to buy monthly passes and yet secure the savings of annuals. The site offered up an example, stating that savings on a monthly pass for a journey from Stratford to central London could be as high as £206.
Petko Plachkov, Founder and MD of CommuterClub, commented:
“In London alone, as many as two million commuters are paying too much on their commute, missing out on savings of up to £500mn3. We want to help the millions of Londoners who are priced out of the Annual. We designed our product from the ground up to fit a modern commuter’s busy lifestyle. That meant that it was low-cost, simple, transparent and fully flexible with easy cancellation.”
“We want to help the thousands of commuters who work for small or medium sized companies, as freelancers or contractors and who don’t have access to a loan from work, give them back the savings they deserve."
The other story here of course concerns RateSetter’s involvement. This is just the latest in a string of innovative B2B partnerships forged between the platform and other disruptive businesses. Mobile phone company GiffGaff, point of sale credit provider Pay4Later and now CommuterClub – all allying themselves with RateSetter in order to source affordable loans for their customers. RateSetter certainly seems to be slightly ahead of the pack in terms of carving out these types of arrangements – and I suspect that they’ll each make a significant contribution to the platform’s already booming lending volumes.
“This is a fantastic new product that we are delighted to get behind. The capital’s commuters are fed up of sky high upfront costs, and CommuterClub is delivering an affordable alternative. RateSetter was set up with the consumer’s best interests at heart, and CommuterClub shares the same ethos – the same focus on community. We are working together to offer an innovative finance solution for Londoners.”