Uber Closes its Leasing Service in Face of Financial Losses
Uber seems to just be shutting all sorts of things down. First, there was the involuntary stop of its operations in London, followed by news that the brand would quite possibly drop its services from all of Quebec. Now, though, the brand is making headlines once more, because it is shuttering its car leasing business, Xchange Leasing.
The reasons why are fairly easy to determine—according to the Wall Street Journal, Uber lost a hefty $9,000 on each of its 40,000 vehicles, way more than the $500 that the ride-share company expected.
The leases were offered to Uber drivers starting in 2015, when the company sought to increase its driver pool by offering vehicles to rent, often to drivers with poor credit that wouldn’t have been able to secure a different lease. Xchange Leasing operated in 10 US states and other international locations.
The Financial Times points out that this is just one of many moves by the company to stem some of the losses associated with its meteoric growth. The Times pointed to the company’s exit from the Russian market by merging its operations with Yandex Taxi, although there is likely no larger example of the company throwing up its hands and surrendering than its withdrawal from the Chinese market after a wildly expensive struggle for dominance with ride-hailing giant Didi Chuxing.
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The leasing service also has lost the company money due to lawsuits, as Uber agreed to a $20 million fine from the US Federal Trade Commission, which levied fines for allegedly overstating the amount of money drivers leasing the vehicles could make working for Uber.
This is yet another tough mess for new CEO Dara Chosrowshahi to deal with.
News Source: Financial Times