The company lost 18 times more than what it expected with the program.
Uber, the ride-hailing giant decided to shut down its car leasing program after it hit the loss that is 18 times more than it expected. The company announced that it is ceasing the Xchange Leasing program which it started to lease the cars to the drivers.
The company initiated the program two years back in order to help the drivers who didn't have good or any credits to own an Uber taxi. The company initially expected to lose $500 per car but, then it turned out to be a $9.000 loss on each car. After the stats came out, the company informed the executives that they are calling off the Xchange Leasing Program.
“We have decided to stop operating Xchange Leasing and move towards a less capital-intensive approach”- stated by an Uber spokesperson.
With the end of the Xchange Leasing program company is looking for a potential buyer for the auto-leasing business, the Wall Street Journal reported. Uber confirmed that the program employs almost 500 scale staff.
However, it is not sure that if they will continue to be part of the business if the company ends up selling to an interested buyer. The Xchange Leasing program has almost 40,000 cars with the 14 showrooms and available in 19 U.S. markets.
In 2013, Uber partnered with the automakers such as Toyota, GM and number of financial institutes to start a leasing program for the drivers. The company then decided to directly lease the cars to the drivers by cutting the intermediates with the launch Xchange Leasing in 2015.
Uber is constantly working to open the platform for more drivers with various tactics and offerings. The company has expanded at a wider scale in recent years within the U.S. and trying to maintain its market with innovative ideas and deals.
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