A typical lease agreement limits driving to around 12,000 miles per year with the option of purchasing more. That could soon change, however, and Uber is at the center of this new automotive approach.
According to Bloomberg, Uber has lowered its barriers for driving for those who are hurting financially. This new approach wouldn’t require Uber drivers to make a big financial commitment with a years-long lease and is much more flexible when it comes to letting drivers return their vehicles when they want.
Uber is partnering with flexible car-leasing startup Fair to supply vehicles to drivers for a reasonable and refundable $185 security deposit. Now, drivers can easily earn that much in credit alone if they complete at least 70 trips a week.
“Uber wants to really find a way to lower the barrier or the hurdle to getting into a car,” said Scott Painter, founder and chief executive officer of Fair. “This is designed specifically to attract drivers who may not even have enough credit to get a traditional car loan of any kind.”
The California-based startup (Fair… not Uber) is expanding to 10 major markets across the United States. The company can use a digital method to link to a user’s credit card or bank account. Though Fair runs a credit check off an applicant’s driver’s license, there is no conventional financing process needed because the company maintains ownership of the vehicle throughout the duration of the lease agreement.
According to PYMNTS, Uber agreed to sell its subprime lending unit to Fair in January of 2018, subsequently providing Fair with access to a set of roughly 30,000 active drivers.
These changes could give Uber the boost it needs to turn a brutal first quarter around — Uber expects to report a net loss of $1 billion when it reports first-quarter earnings.
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