Uber is unburdening its loses by giving away its right on auto-leasing business to Santa Monica startup Fair.com. The ride-sharing giant has taken the step in order to come over the loses it has been experiencing in the past. Named as Xchange leasing, Uber’s subprime auto-leasing business was launched a few years back. The services were aimed at the drivers having a spotty history to lease a car to drive for the ride-hailing company.
The idea behind the auto-leasing concept was to get more drivers for Uber and make the services better for them. It also aimed to reduce passenger’s wait time along with authenticating its service quality. The drivers were charged an amount of $500 a month on a 36-month lease term and the amount was deducted from driver’s earnings. The program didn’t go as planned as it ruined the already poor score of drivers.
Even though the auto-leasing deal seems to be ideal, the giant-ride sharing company failed to make enough profit. Instead Uber lost $9000 per vehicle as per the reports from Wall Street Journal. In order to recover from the loses Uber decided to shut down the Xchange leasing only in September this year.
Uber Xchange auto-leasing has more than 30,000 cars worth $400 million. Uber’s deal with Fair.com is thus a way out for the ride-sharing giant to have some of its profit back from the same. Fair.com was established last year to work as an app-based car marketplace that matches the right car with the potential customers depending upon their specific choices.
The startup buys new and old vehicles to use for car dealerships by listing those vehicles in its app additionally mentioning the monthly charges for the same. The customers can benefit from hiring these vehicles by picking the one as per their needs getting it approved and pick up the same from the dealership.
The move from the ride-sharing giant is not at all a surprise as Uber introduced similar intentions months back through its official comments. Uber’s spokesperson on the same context has also quoted “We have decided to stop operating Xchange Leasing and move towards a less capital-intensive approach.” it clearly shows that Uber has taken a very planned move in order to curtail the losses it has already experienced.