Uber may sell or consolidate car-leasing subsidiary
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