Uber is scaling back on USA vehicle leases as expenses pile up

Uber is scaling back on USA vehicle leases as expenses pile up

Uber has always been criticized for lending practices created to reel in prospective drivers to the ride-hailing company, particularly their program to push people into subprime auto loans. In January, Uber paid $20 million to settle a U.S. Federal Trade Commission lawsuit that said Uber made false or misleading claims about its leasing program. But as Uber grew it also needed a way to get more drivers on the road, and in the USA that meant helping more Americans who wanted to drive get the right kind of cars. In June, Quartz looked into Uber's leasing efforts with third-party vendors in New York City and found an array of unseemly tactics.

Uber Technologies Inc. will close or sell its car-leasing subsidiary, sources close to the decision said Tuesday.

This is according to a report from CNBC who have heard from their sources that Uber is planning to shut down its vehicle leasing business, or alternatively they could be thinking of selling it off, or maybe consolidate it to make it more efficient.


Xchange's leasing program, which has over 40,000 vehicles in operation, has seen major losses since its launch. The Xchange Leasing division had been projecting losses of around $500 per auto on average, but managers informed Uber executives that the losses were about $9,000 per car, roughly half that of a typical sticker price on a leased vehicle. The stringent move could come as Uber executives have realised that they're losing far more money on leases than ever planned and that the business is too capital-intensive to be sustainable.

The source familiar with Xchange said the company and its board of directors chose to significantly alter Xchange in order to provide vehicle options to prospective drivers.

Assuming this is true, clearly this is not a very good business model.

Related:

Comments

Latest news

Elon Musk has commented on his split from actress Amber Heard
He cited long distance relationship beset with heavy work schedules as the culprit that cause the demise of their romance. According to Amber Heard , she and ex-boyfriend Elon Musk are still good friends.

Businesses Damaged by Possible Tornado in Tulsa
Meanwhile, flash flooding submerged parts of Kansas City and New Orleans in water this weekend. Damaged power lines left more than 15,000 people in the dark at the height of the storm.

Dustin Pedroia is back in lineup and batting second for Red Sox
However, with left-hander Chris Sale on the bump for Boston on Tuesday, the Rays are moving Hechavarria into seventh. PIRATES 6, TIGERS 3 Andrew McCutchen hit his 23rd home run of the season and surging host Pittsburgh downed Detroit.

Galaxy S9 to sport a larger battery, claim sources
Samsung is also expected to bring an in-display fingerprint sensor on the Galaxy S8 but will not likely come to fruition. It doesn't mean the Qualcomm version of Samsung Galaxy S9 will have a smaller battery than its Exynos counterpart.

Seth Meyer's mocks Kayleigh McEnany's Trump News gig
On Monday, the RNC announced that McEnany will be their national spokesperson and play a crucial role in the party's messaging.

Other news