Uber may sell or con­sol­i­date car-leas­ing sub­sidiary

New Straits Times - - Business -

SAN FRAN­CISCO: Uber’s board de­ter­mined Xchange Leas­ing, a wholly-owned unit, is un­sus­tain­able and should be sold or con­sol­i­dated into a smaller unit, said a source.

The board de­cided last month to wind down the pro­gramme, which pro­vides sub­prime car leases to driv­ers in its ser­vice, af­ter dis­cov­er­ing it was more ex­pen­sive than orig­i­nally thought.

Xchange had been es­ti­mat­ing losses of about US$500 (RM2,144) per car, but they are closer to US$9,000 per car, said the source.

The move is a sharp de­par­ture for Uber, which launched the pro­gramme two years ago, buoyed by a US$1 bil­lion credit fa­cil­ity pro­vided by Gold­man Sachs. Xchange cur­rently of­fers 40,000 ve­hi­cles for lease through 14 show­rooms through­out in the United States.

As many as 500 jobs could be af­fected by the sale, said the Wall Street Journal, on Tues­day.

Uber aims to make a sale or down­size the leas­ing firm by the end of the year, said the per­son.

Fol­low­ing a stream of con­tro­ver­sies ear­lier this year, in­vestors have urged Uber to con­sol­i­date its busi­ness and cut costs in prepa­ra­tion for an even­tual pub­lic of­fer­ing. Bloomberg

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