Inside Uber’s Auto-Lease Machine, Where Almost Anyone Can Get a Car

[FrodosPet]

This might be OK where the runs are phat and frequent, but in smaller markets where it is tough to make consistent cash this could be an economic death trap.
[hr]
http://www.bloomberg.com/news/articles/2016-05-31/inside-uber-s-auto-lease-machine-where-almost-anyone-can-get-a-car

by Eric Newcomer and Olivia Zaleski
May 31, 2016 — 11:00 AM EDT

In its relentless pursuit for growth, Uber needs new drivers, and many of those drivers need cars. To help them get started, Uber has been offering short-term leases since July through a wholly owned Delaware-based subsidiary called Xchange Leasing, LLC. It partners with auto dealerships, advertises to drivers, manages risk, and even pays repo men to chase down cars whose drivers aren't making their payments.

~ snip ~

In a deal led by Goldman Sachs, Xchange received a $1 billion credit facility to fund new car leases, according to a person familiar with the matter. The deal will help Uber grow its U.S. subprime auto leasing business and it will give many of the world's biggest financial institutions exposure to the company's auto leases. The credit facility is basically a line of credit that Xchange can use to lease out cars to Uber drivers.

Xchange caters to people who have been rejected by other lenders. The program is run by Andrew Chapin, who pitched it to Uber Chief Executive Officer Travis Kalanick in 2012. Before joining Uber, Chapin was a Goldman Sachs commodities trader. He oversees all of Uber's auto-financing efforts, including a partnership with Enterprise Rent-A-Car and vehicle-purchase discounts. "I want the driver to get an option that is best for them," Chapin said. "I try to provide a menu of options that the industry thus far has not provided."

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He leased a 2016 Toyota Corolla from Xchange in November, paying $155 a week. Two months later, Uber slashed fares nationally. Soon Hofstede had trouble keeping up with his payments. He went from making $200 in a weekend to $140 in a weekend, he said. "It got to the point that I would drive just to meet my payment," he said. "If you were short on your payment for a week it would roll onto the payment for next week. It starts adding up."

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[Actorvist]

1. uber is a scam, as is lyft

this gig economy is almost worse than the financial crisis; at least when you're in the stock market, you know its a gamble. Uber, Trump University, Primerica, they're all the same thing: phony "jobs" selling poor quality products.

[grasswire]

2. the new sharecropper? nt

[Initech]

3. If there's an evil money grabbing scam, why am I not surprised Goldman Sachs is involved?

Worst company on earth after Monsanto!

[NightWatcher]

4. $620 a month to lease a Corolla? All so you can work for Uber?

These people need to go work for a traditional cab company. Uber will take their money and give them zero coverage if they have a problem or get into a wreck.