In September, Uber said it was canceling plans to shut down its auto leasing business which has not been performing to its high standards. Over these last few months, Xchange Leasing has started to unwind the leasing business to Uber drivers, selling cars at auctions.
The netbook value of Xchange’s Leasing of more than 30,000 vehicles was roughly at $400 million, reported The Wall Street Journal, which Fair first reported on Tuesday. In August, the newspaper said that Uber was losing around $9,000 a car, 18 times more than previously thought.
Reuters has previously reported that Xchange Leasing had about 14 showrooms in the United States.
Uber launched Xchange Leasing back in 2015 to attract new drivers who could not otherwise afford a car due to various reasons such as poor credit. In addition, Xchange Leasing offered more flexible return and mileage limit policies than other traditional car leasers.
Unfortunately, many Uber drivers have complained about Xchange’s practices, stating that the rates had forced them to drive full time to cover the cost of the car, only to end up with almost no profit.
The Wall Street Journal reported that Fair would offer jobs to 150 to 500 working at Xchange Leasing.
Fair is based in Southern California and was started in 2016. The company matches customers with cars based on what they can pay by the month. Customers get approved and pay for the car through Fair (which owns the vehicle), pick it up at the dealership and keep it for as long as they desire.
As part of the deal, which is expected to close by early 2018, Uber will be offering potential drivers in the United States the option to lease a car through Fair, The Journal reports.
A potential 2019 public offer for Uber is possibly in the works to pare its losses under Chief Executive Dara Khosrowshahi and Chief Operating Officer Barney Harford, who starts next month. Uber lost $1.46 billion in the third quarter this year, up from $1.06 billion in the previous quarter.