Uber Selling U.S. Subprime Vehicle-Leasing Business: Report
Ride-hailing service gets undisclosed sum from startup car marketplace Fair.com, Wall Street Journal says.
Uber has struck an accord to sell its auto-leasing business to startup car marketplace Fair.com, according to a newspaper report.
The ride-hailing company's sale of its Xchange Leasing for an undisclosed sum brings to a close efforts by Uber to attract drivers who otherwise lack options for having an auto, according to The Wall Street Journal, which cited people familiar with the matter.
Critics said the Uber unit was a failed attempt at taking advantage of people with poor or non-existent credit histories.
The deal has Uber taking an equity stake in Fair.com, and would-be drivers would be granted access to the marketplace site via the Uber app, WSJ reported.
Uber did not immediately reply to a request for comment from The Drive, while a spokesperson for Fair.com said the company was not commenting "at this time."
Dara Khosrowshahi, Uber's new CEO, is said to be trying to improve the company's stance with its workers and in the public's eyes as he works to take the company public in the next year or two.
Xchange offered consumers leases with $250 as a deposit and weekly payments taken from Uber earnings, casting the short-term loans as an option for people who otherwise would not have a vehicle.
The business started by Uber in 2015 proved far more expensive than the company had anticipated, WSJ said.
Each car was costing Uber about $9,000, far more than the $500 estimated by Uber, according to the WSJ. The loan payments also compelled drivers to work more hours, cutting the resale value of vehicles with the added wear and tear.