Xchange Leasing

About Xchange Leasing

Xchange Leasing was a wholly-owned subsidiary of Uber, established in mid-2015 as a vehicle leasing program. The company was founded by Garrett Camp, who is also a co-founder of Uber. Xchange Leasing's primary objective was to increase the number of drivers on the Uber platform by providing vehicle access to individuals who might not qualify for traditional car loans due to poor or no credit history. This initiative was a strategic departure from Uber's asset-light model, aimed at overcoming a significant barrier to entry for potential drivers: the lack of a qualifying vehicle.

The business operated by offering flexible leases on new and used cars directly to Uber driver partners. Key features of the program included unlimited mileage and the inclusion of basic vehicle maintenance, such as oil changes and tire rotations. Weekly payments were deducted directly from the drivers' Uber earnings. The company managed a fleet of approximately 40,000 vehicles and operated through 14 showrooms across the United States. The program was initially bolstered by a $1 billion credit facility from Goldman Sachs.

Despite its strategic intent, the Xchange Leasing program proved to be financially unsustainable. In 2017, it was discovered that the subsidiary was losing approximately $9,000 per vehicle, a figure drastically higher than the initially estimated $500 loss per car. These substantial losses were attributed to factors such as high depreciation and vehicles being returned in poor condition, which damaged their resale value. The program also faced criticism for its high costs compared to other leasing options and for what some considered predatory terms. As a result, Uber decided to shut down the operation in late 2017. Following the decision to cease operations, Uber sold the Xchange Leasing portfolio to Fair.com, a car-leasing startup, in a deal announced in early 2018. This sale marked Uber's exit from the capital-intensive vehicle leasing business and a return to its core asset-light strategy, while Fair became Uber's exclusive partner for long-term vehicle solutions for its drivers in the U.S.