While Uber might be known more for its ride hailing services, they also have a car-leasing business where they leased cars to drivers who might not have a car that’s suitable or eligible to be used with Uber’s services. Unfortunately it seems that the endeavor is actually costing the company more than they expected, so much so that they are thinking of shutting it down.
This is according to a report from CNBC who has heard from their sources that Uber is planning to shut down its car leasing business, or alternatively they could be thinking of selling it off, or maybe consolidate it to make it more efficient. A report from The Wall Street Journal has suggested that Uber is making losses as much as $9,000 per car, versus the $500 that they had initially predicted.
Assuming this is true, clearly this is not a very good business model. Should Uber decide to shut it down, it is said that 500 jobs out of the 15,000 could be affected by it. Interestingly enough Uber drivers have long complained about the high lease payments, but it seems that even what Uber charges isn’t enough to cover its losses, so really, it doesn’t seem like anyone is winning in this situation.
Uber has yet to officially respond to these reports so do take it with a grain of salt for now.
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