Uber to Sell Xchange Leasing to Fair

The ride-hailing company, Uber, is working on a deal to sell its U.S. auto-leasing business, Xchange Leasing, to Fair, a digital car marketplace.

Uber to sell its auto-leasing business to Fair.

Uber Technologies Inc. stated in September that it was shutting down the auto-leasing business, which had heavy losses.

Over the last few months, Xchange Leasing has begun to unwind the business, which was started to lease new cars to Uber drivers and selling cars at auction.

According to a report, the net book value of Xchange Leasing with more than 30,000 vehicles was roughly $400 million. A report in August said that the ride-hailing company was losing roughly $9,000 a car, 18 times more than previously believed.

As of August, Xchange Leasing had about 14 showrooms in the United States.

Uber and Fair declined to comment about the deal on Tuesday.

Uber launched Xchange Leasing in 2015 in a bid to draw new drivers who could not afford a car because of spotty or poor credit.

The U.S. auto-leasing business offered more flexible return and mileage limit policies than traditional car leases.

However, many drivers from Uber had complained about the predatory practices of Xchange Leasing, stating that the exorbitant rates forced them to drive full time just to cover the cost of the car, with few or no profit left over.

A report stated that Fair would offer jobs to the 150 of the 500 or so employees at Xchange Leasing.

Fair, which is based in Southern California, and was founded in 2016, matches consumers with cars based on what they are able to pay each month. Customers get approved and pay for their car through 

Fair, which owns the car, and pick up the vehicle at a dealership.

The customer can keep the vehicles as long as they want.

As part of the deal, which is expected to close early next year, Uber Technologies Inc. will offer potential drivers in the United States an access to Fair to lease a car, according to the report.

The ride-hailing company is eyeing an initial public offering in 2019, and is looking to pare its losses under the leadership of Dara Khosrowshahi, Chief Executive of Uber, who starts next month.

Uber lost $1.46 billion in the third quarter this year, increased from $1.06 billion in the previous quarter.

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