📺 Stream EntrepreneurTV for Free 📺

Uber Launches Car Leasing Unit, Makes Entry Into Financial Services It's an effort to sign up more drivers, injecting the fast-growing ride services company directly into the financial services sector for the first time.

By Reuters

entrepreneur daily

This story originally appeared on Reuters

REUTERS | Kai Pfaffenbach

Uber Technologies has launched its own auto leasing subsidiary in an effort to sign up more drivers, injecting the fast-growing ride services company directly into the financial services sector for the first time.

The move by Uber, announced as a pilot project on Wednesday, follows the end of its partnership with Banco Santander's U.S. lending unit earlier this year.

Uber announced the initiative but disclosed few financial details, though it said it would offer both new and used cars.

Uber launched a program in November 2013 to arrange manufacturer discounts and lenders for prospective drivers who lacked cars in the hopes it would boost vehicles driving for the app-based service.

At the time, Uber said it hoped to finance 100,000 drivers. Nearly 20,000 drivers have participated in the program so far, Uber said.

Santander Consumer USA Holdings declined to comment last week on why the Uber leasing deal ended. Uber continues to partner with other lenders for car purchases.

Andrew Chapin, head of vehicle solutions for Uber, this week said Uber wants to provide drivers with more flexibility than traditional leasing companies can offer. Participants in Uber's program can return their vehicle with two weeks notice and "limited additional costs," the company said.

One of the fastest-growing sharing-economy companies, Uber operates in 57 countries, with an estimated value of more than $40 billion. It has also tangled with transportation authorities across the globe, along with attorneys seeking to deem Uber drivers employees entitled to benefits.

Uber's entry into auto leasing brings it into contact with yet another set of regulators in a controversial business. The U.S. Consumer Financial Protection Bureau last month said it would oversee non-bank auto lenders who process at least 10,000 loans or leases per year.

The CFPB said it seeks to ensure such leases are marketed accurately, and that debt collectors operate fairly.

Santander has been criticized for its subprime auto loan business. The company disclosed a civil subpoena from the U.S. Department of Justice and other regulatory agencies for documents related to underwriting and securitization of such loans.

Uber's leases will be held on the subsidiary's books during the pilot program, Chapin said, but that will change longer term. The company itself will not be a party to any lease between a driver and the subsidiary, so any change in driver rates would not alter the terms of a lease.

(Reporting by Dan Levine; Editing by Cynthia Osterman)

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Starting a Business

I Wish I Knew These Four Things Before Starting My Own Business

Starting a business is hard work to say the least. These are four lessons I wish someone had shared with me before going solo, so I'm here to share them with you.

Social Media

How To Start a Youtube Channel: Step-by-Step Guide

YouTube can be a valuable way to grow your audience. If you're ready to create content, read more about starting a business YouTube Channel.

Devices

Add Some Life to the Office with $60 off This Bluetooth Speaker

This TREBLAB speaker provides 360-degree HD sound and high-powered connectivity.

Thought Leaders

Need More Confidence? These 10 Bestselling Books Will Help Improve Your Self-Esteem

Self-esteem can be hard to come by and even harder to maintain. To give yourself a boost, try these authors' words of wisdom.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business Solutions

Organize Your Podcasts and Audio Content with This $40 Plan

Player FM lets you organize and sync podcasts across different platforms in one place.