Is regulation required to protect SMEs from aggregator apps?

Concerns mount as Free Now misses payment deadlines to taxi drivers

For many people, touching cash in the age of Covid-19 is akin to handling a biohazard. It is not surprising that public service providers, such as taxi drivers, are reporting that more customers now prefer to use a contactless method of payment where possible, instead of cash.

For many taxi drivers, this means relying on bookings and payment through a third-party app such as Free Now, which has signed up close to 14,000 Irish drivers. The app handles the customer’s payment and later forwards it on to the driver, less a 15 per cent commission.

The ubiquity of the app means many taxi drivers are heavily exposed to Free Now should issues ever arise with it making payments to them.

That is precisely what transpired in recent weeks, when Free Now missed a series of payment deadlines to drivers, sparking concern in the trade. Many drivers were left owed sums equivalent to most of one week’s earnings, when Free Now’s weekly payment run failed for the second week in a row.


Free Now blamed the delays on Wirecard, its payments processor, and promised to switch to another payments service. It said the drivers would be paid “as soon as possible” and that the money owed has already left the company’s account and was on its way to drivers.

The episode highlights how problems at third-party aggregators, such as Free Now and also the various apps in the food home delivery sector, can potentially leave vulnerable small business owners and sole traders in a difficult position.

In essence, such apps have full control over money that does not belong to them. In the financial services sector, service providers that handle other people’s money in this way are tightly regulated. Third-party aggregators face no such scrutiny.

Cormac Devlin, a Government TD, has called for Ministers to examine whether legislation is required to make sure that aggregator apps properly protect the money that they handle, but which does not belong to them. It is an idea worth exploring.