Uber Technologies is going nationwide (in the US) with a program that helps those without a car – or the financial means to get one – drive for the ride-hailing giant.<\/p>\n
Since January, Uber has partnered in California with flexible car-leasing startup Fair to supply vehicles to drivers for a $185 refundable security deposit.<\/p>\n
Drivers can then earn that much in credits from Uber if they complete 70 trips a week, which can effectively offset payments owed to Fair.<\/p>\n
“Uber wants to really find a way to lower the barrier or the hurdle to getting into a car,\u201d Scott Painter, Fair\u2019s founder and chief executive officer, said in a phone interview about the program, which is expanding to 10 major markets across the US.<\/p>\n
“This is designed specifically to attract drivers who may not even have enough credit to get a traditional car loan of any kind.”<\/p>\n
Uber agreed to sell its subprime-lending unit to Fair in January 2018, which gave the startup access to a pool of drivers that now make up roughly half of the company\u2019s more than 30,000 active users.<\/p>\n
Initially conceived as a way to help new drivers get started, Uber\u2019s unit formerly known as Xchange Leasing racked up losses and drew criticism for saddling drivers with financial commitments they struggled to meet.<\/p>\n
Painter said Fair\u2019s model will be less risky because the company is more flexible about allowing drivers to return a car when they want and isn\u2019t requiring them to make a significant financial commitment over a years-long lease.<\/p>\n
Fair also maintains a digital link to a user\u2019s bank account or credit card. While the company runs a credit check off an applicant\u2019s driver\u2019s license, there\u2019s no traditional financing process needed because Fair maintains ownership of the vehicle.<\/p>\n
Uber is expected to report a net loss of about $1 billion when it reports first-quarter earnings Thursday afternoon. Shares of the San Francisco-based company were little changed as of 10:30 in New York.<\/p>\n
Ahead of its $8.1 billion initial public offering this month, drivers staged protests and strikes in major cities across the US and UK over low wages and unstable working conditions.<\/p>\n
The company warned in its IPO prospectus that driver dissatisfaction could increase as it tries to reduce incentives and improve financial performance.<\/p>\n