Uber tests flexible car leases for drivers-Another Rip-off Of Drivers And Public

Uber tests flexible car leases for drivers-Another Rip-off Of Drivers And Public
Uber tests flexible car leases for drivers
http://www.sfchronicle.com/business/article/Uber-tests-flexible-car-leas...
By Carolyn SaidJuly 30, 2015 Updated: July 29, 2015 8:50pm

Photo: Eric Risberg, Associated PressUberX drivers can get three-year auto leases that are relatively easy to terminate.
Uber has a new program to get more drivers on the road. The San Francisco company is testing a flexible car leasing program for drivers starting Thursday in San Francisco, Los Angeles, San Diego and some cities in Georgia and Maryland.

With Xchange Leasing, drivers for UberX can get three-year auto leases through dealers, with the option to terminate their contracts anytime after the first month with a $250 security-deposit fee and two weeks’ notice. Leased cars — both new and used — will come with unlimited mileage and some routine maintenance.

“Right off the bat, I could tell that it’s much superior to Uber’s previous leasing program,” said Harry Campbell, a Los Angeles driver who writes TheRideShareGuy blog. Uber e-mailed him and other drivers with details on the new lease option a couple of days ago.

Uber’s previous leasing program with Santander Consumer USA got a lot of bad feedback as an expensive plan with almost no way for drivers to cancel.

FOCUS ON UBER

• Employee, contractor — or something else entirely?
• EDITORIAL: Uber must play by the rules of the road
• CA regulators to Uber: Pay $7.3M fine or cease operations
• Uber settles suit with family over girl’s New Year’s Eve

“I don’t know a single driver who was happy with it,” Campbell said. “A lot of drivers had signed up for it and then Uber cut rates within a few months, so they felt it was a bait and switch.” Uber canceled the program this year.

Campbell thinks the new plan’s flexibility will appeal to drivers, and noted that it seems like a serious challenge to a leasing program offered by San Francisco startup Breeze. That company began a year ago in San Francisco.

Xchange Leasing terms depend on the vehicle. For instance, a 2013 Camry with a sale price of around $15,000 would lease for about $120 a week over a 36-month term, Uber said.

Difficulty in getting a car is a common problem for some potential drivers, according to Uber’s Andrew Chapin. Lacking down payments, having poor credit or having other financial problems are the most common impediments. In response, the company created its vehicle solutions program, headed by Chapin. Since late 2013, it has offered partnerships with dealers and manufacturers to help Uber drivers buy or lease vehicles. About 20,000 drivers have used the program, Uber said.

Uber’s car financing program also generated criticism that it includes subprime loans with excessively high interest rates. Chapin said no one would argue that the third of Americans considered subprime borrowers should be locked out of car purchases.

Uber is not trying to generate a profit with Xchange and the other programs, instead running them as break-even enterprises, it said.

Uber is also testing a rental plan with Flexdrive, a Cox automotive company. That pilot program in Atlanta, Dallas and Nashville offers weekly rentals, including insurance and maintenance, for about $200.

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com Twitter: @csaid