Skip to main content

Uber has shut down Xchange Leasing after learning it’s seriously in the red

Uber's ailing Xchange Leasing branch purchased by Fair.com

Xchange Leasing
Worawee Meepian/123RF
It’s no secret that Uber has always had trouble hanging onto money, but now that it’s being kicked out of a major market, the transportation giant is doing everything it can to cut costs. The latest casualty at Uber is Xchange Leasing, its American auto-leasing business. And given that the venture was losing 18 times more money on each vehicle than previously believed, it seems like the wise choice in this situation. Luckily, just a few months after deciding to shutter Xchange, Uber has found a buyer for the business — Fair.com.

As initially reported by the Wall Street Journal, Uber first began toying with the idea of closing down the business over the summer. The original hope was for a buyout, but the company appeared to get impatient a few months ago, and shut Xchange Leasing down without a buyer over the summer, affecting about 500 jobs. Simultaneously, however, Uber launched a sale process, and now, that process has reached its conclusion.

It’s unclear how much Fair paid for the leasing service, but the company itself is well versed in the rentals business. Its customers name a price for a rental vehicle, and Fair does what it can to match these customers with a car purchased from a local dealership. These vehicles can then be returned at any time. Thus far, the firm has raised around $85 million in equity, and has racked up $1 billion in debt (sound familiar?).

 “We have decided to stop operating Xchange Leasing and move toward a less capital-intensive approach,” a spokesman confirmed to the Journal back in September. Originally begun in 2015 under ex-CEO Travis Kalanick’s leadership, the leasing program was bolstered by an investment of around $600 million. Uber hoped that this initiative would make it easier for the company to recruit drivers who would otherwise be unable to provide their own vehicles.

Unfortunately, this didn’t work quite as planned, as the Journal reported many drivers returning the leased cars in “poor shape, damaging their resale value.” Ultimately, the company was forced to place drivers in increasingly expensive leased vehicles, which meant that the drivers had to work longer hours in order to pay back the lease, thereby creating more wear and tear, and perpetuating a vicious, net-loss cycle.

By July, Uber realized that Xchange was in the red by about $9,000 for every vehicle in the fleet (previous estimates suggested this figure was just $500). There were a total of about 40,000 cars in the fleet, which represents a whole lot of debt.

Hopefully, the sale of the business will do something to negate that red zone.

Lulu Chang
Former Digital Trends Contributor
Fascinated by the effects of technology on human interaction, Lulu believes that if her parents can use your new app…
Car2Go car-sharing service shutting down in the U.S. after reality check
daimler car2go car sharing benefits

Those who predicted and hoped shared autonomous cars would rule the roads by 2020 are in for a serious reality check. Driverless technology is much farther away than expected, and one of the largest car-sharing programs, Share Now, announced it will end its operations in North America and select international cities in early 2020 due to low adoption rates.

We should have seen this coming when Car2Go, a division of Mercedes-Benz parent company Daimler, surprisingly merged with Drive Now, a comparable program created by arch-nemesis BMW, to become Share Now. It's rarely a good sign when rivals set aside their differences and hold hands. The jointly-owned firm explained it will cease operations in the United States and Canada on February 29, 2020, and it is not planning on coming back for the time being.

Read more
Uber says drivers aren’t an essential part of its business
Uber Chief Legal Officer Tony West

Uber’s top lawyer said it would not comply with a California bill that would force it to treat its contract drivers as employees, claiming that drivers are not a core part of the company’s business.

Speaking on a conference call on Wednesday, Uber chief legal officer Tony West pushed back against the newly passed Assembly Bill 5 (AB5), which will require app-based companies in the gig economy to reclassify their workers as regular employees.

Read more
Best electric car charger deals: $100 off home charging stations
The handle of the Grizzl-E EV charger plugged into a vehicle.

While they may not dominate the market just yet, electric vehicles have become pretty massive in the past few years, with many people seeing them as the perfect alternative to traditional combustion engines. Of course, because EVs aren't as widespread, that means that there aren't always a ton of charging stations around, and sometimes those have inoperative or full chargers, leading to quite a few issues down the road. Luckily, you can get some excellent car chargers at home, which is why we've collected our favorite car charger deals for you below to save you trouble.
Seguma 16Amp Level 1/2 EV Charger -- $120, was $160

If you need a more basic charger, this Level one and two charger from Seguma is a solid option and can deliver 16 amps and 3.84kW, which is pretty substantial. It also comes with a NEMA 6-20 plug and a standardized J1772 connector, which should work on most EV vehicles out there except for Tesla, which has its own connector. There are also some intelligent charging features, which include things such as protection against things like under and over voltage, leakage, and lighting, and it has an automatic cut-off when your EV is fully charged.

Read more