Uber sells its XChange Leasing unit to Fair.com. Subprime auto leasing business of Uber Technologies has been sold out in the U.S to Fair.com, a car marketplace startup.
XChange Leasing of Uber Technologies offers flexible leases that have been designed just for Uber driver partners.
According to the Wall Street Journal, the sale of the unit does mark the end of an attempt by Uber to get new drivers who do not have access to vehicles.
XChange Leasing unit, had been searching for a buyer since the summer. In September 2017, Uber disclosed its plan to sale this unit because it was losing around $9,000 a car. And the unit was started being winded down in September and this impacted around 500 jobs.
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When in September, Uber put the unit up for sale, terms and conditions of the deal were not disclosed to the Wall Street Journal. However, the paper reviewed a document compiled for potential buyers stating that the net book value of its vehicles -more than 30,000- was around $400 mn. The deal is being expected to be closed in the early part of the year.
While following the terms of the acquisition, both of the companies will be working together via an exclusive agreement, with Uber offering would-be drivers access to Fair on its mobile phone aplication in the U.S.
According to the reports, Uber will acquire an equity stake in Fair, and Fair is giving up to 150 jobs to XChange Leasing staffers.
The transaction is coming at a time when Uber is in cost-cutting mode, and the company is aiming to reduce expenses on the heels of $2.52 billion in losses during the previous six months, which comes as revenue & the number of rides booked increased in the same period of time.
The ridesharing company is mulling an IPO after almost one year in 2019. Accordinb to the sources, under its new CEO Dara Khosrowshahi, the company is trying to overhaul its troublesome company culture.
The Wall Street Journal had noted that Uber has uploaded a separate stake in a Singapore car leasing business.
Though the buyer was aware of the money loosing nature of the unit thar Uber sold to him, it would be worth noticing what kind of strategies the buyer company have that gives confidence to it to take risk of purchasing what couldn’t serve its former owner in the way he wanted.
Uber Technologies Inc. is actually a global taxi technology company. This company is headquartered in San Francisco, California, United States and the company is operating in 633 cities worldwide. Uber Technologies Inc develops, markets and operates the Uber car transportation & food delivery mobile applications.
