Uber has agreed to sell its subprime auto leasing business, Xchange Leasing, to Santa Monica car marketplace Fair.com, the Wall Street Journal reported Tuesday, citing unidentified sources.
Terms of the deal were not announced, and it is unclear how Fair.com plans to incorporate Xchange Leasing. Neither Uber nor Fair.com responded to a request for comment.
Uber launched Xchange Leasing in 2015 to help U.S. drivers with poor credit histories lease a car to drive for the ride-hailing company. The idea was that the more people were driving for Uber, the better Uber’s chances of reducing passenger wait times and increasing market share. The company charged drivers nearly $500 a month on a 36-month lease and deducted payments from their earnings.
The program created problems for drivers who fell behind on lease payments. For some, it worsened their already poor credit. Others drove extra hours to make the payments, adding wear to the vehicles.
Despite the high lease fees, Uber lost about $9,000 per vehicle, the Wall Street Journal reported.
Xchange Leasing has more than 30,000 cars worth roughly $400 million, the Wall Street Journal reported.
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