Latest in Gear

Image credit: PA Wire/PA Images

Uber is reportedly closing down its car-leasing program in the US

The ride-hailing service is apparently losing way more money than it expected.
262 Shares
Share
Tweet
Share
Save
PA Wire/PA Images

Uber's terrible, awful, no-good 2017 isn't over yet. Two years after it started leasing cars to drivers, the ride-hailing company has realized that it should've looked at the economics of such a little better. "The average loss per vehicle was about 10 times what they had thought," the Wall Street Journal reports. Specifically, WSJ's sources say that the company is losing around $9,000 per car. That's a stark contrast to the $500 per-car losses it expected.

And that's not all. Uber apparently sunk some $600 million into its domestic leasing program, opening it to 24 markets. Recently, the company came under fire for leasing unsafe vehicles to drivers in Singapore.

As WSJ describes, this part of Uber's business seems like it was doomed from the start. Sources say that the lease costs were more than a driver would pay a typical dealer, which in turn pushed drivers to take more fares. More fares meant more wear and tear on a vehicle, which resulted in lower resale values of said cars.

On top of that, dealers outside of Uber's own shops were often pushing drivers into more expensive vehicles and perpetuating the vicious cycle. WSJ has even more details so make sure to check out the link below. But rest assured, if you had August 8th in your "Uber is gonna turn itself around" betting pool, today is not your day.

From around the web

ear iconeye icontext filevr