WesBank in deal to lease 1,000 cars to Uber drivers
VEHICLE finance specialist WesBank has signed a deal to lease cars to Uber drivers. Although the first phase will provide up to 1,000 vehicles, the plan is to increase this to 15,000 within two years. Uber is a cashless, app-based taxi service operating in 344 cities across 63 countries. In SA, where it is active in Johannesburg, Cape Town and Durban, Uber wants to draw its drivers from poor backgrounds.
VEHICLE finance specialist WesBank has signed a deal to lease cars to Uber drivers.
Although the first phase will provide up to 1,000 vehicles, the plan is to increase this to 15,000 within two years.
Uber is a cashless, app-based taxi service operating in 344 cities across 63 countries. In SA, where it is active in Johannesburg, Cape Town and Durban, Uber wants to draw its drivers from poor backgrounds.
It wants them to run their own cars, but as almost all have limited income and no credit records, they will not get loan finance. Their task is made harder by the fact that they must buy new cars, selected from models approved by Uber.
“Uber is very prescriptive in this regard,” WesBank CEO Chris de Kock said yesterday. “The requirements are quite stiff.”
The solution, he said, was for the bank to supply vehicles on a full maintenance lease.
WesBank would retain ownership and lease cars to drivers. Rates would be levied per kilometre, to cover the cost of insurance, maintenance and depreciation.
Alon Lits, Uber’s sub-Saharan Africa GM, said: “Because the programme developed with WesBank offers rates significantly more competitive than these drivers would otherwise have been able to obtain, their business ventures have a far better chance of succeeding in the long term.”
WesBank’s financial risk is mitigated by Vumela, an enterprise development fund specialising in small- to medium-enterprises with high growth potential. Vumela has put up R20m for the first 1,000 vehicles, covering WesBank against possible losses.
Mr De Kock said: “It’s an underpinning guarantee, in the event that a car is lost or a driver doesn’t generate enough revenue to meet his obligations.”
He said Vumela also had a role in business education for drivers.
“It will help them understand what it means to be self-employed; how to cope with peaks and troughs in income and how to plan for the future.”