Report: Uber selling car-leasing business
Uber has agreed to sell its subprime auto-leasing business, Xchange Leasing, to Santa Monica, Calif., car marketplace Fair.com, the Wall Street Journal reported, citing sources.
Terms of the deal were not announced, and it is unclear how Fair plans to incorporate Xchange Leasing into its own business. Neither Uber nor Fair responded to requests for comment.
Uber launched Xchange Leasing in 2015 with the aim of helping U.S. drivers with spotty credit histories lease a car to drive for the ride-hailing company. The idea was that the more people were driving for Uber, the better Uber’s chances of reducing passenger wait times and increasing market share. The company charged drivers nearly $500 a month on a 36-month lease and deducted payments from drivers’ earnings.
The program created problems for drivers who fell behind on lease payments. For some, it worsened their already poor credit. Others drove extra hours in an attempt to make the payments, adding wear and tear to the vehicles.
Despite the high lease fees, Uber lost about $9,000 per vehicle, the Journal reported.
In September, Uber decided to cut its losses and shut and sell Xchange.
According to Tuesday’s Journal report, Xchange Leasing has more than 30,000 cars worth $400 million.
Experts say the move signals a more disciplined, cost-cutting approach by newly installed chief executive Dara Khosrowshahi, who is aiming to take the ride-sharing company public within the next two years and is vying to repair Uber’s relationship with its drivers and the public.
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