2017-08-11 — wolfstreet.com
Two years ago when these folks launched the subprime auto leasing program to put their badly paid drivers into new vehicles they couldn't otherwise afford, they apparently didn't do the math.
The Xchange Leasing division had been estimating modest losses of around $500 per auto on average, these people said. But managers recently informed Uber executives that the losses were actually about $9,000 per car -- about half the sticker price of a typical leased vehicle.
In the overall subprime auto loan segment, defaults are soaring. And Uber wasn't spared. So costly repossessions hammered the program, these people told The Journal.
The numbers are big. Uber has titles to nearly 40,000 vehicles through Xchange Leasing. It now has to get the cars back from its drivers and sell them in the wholesale market. It wants to do most of this by year-end. If Uber loses $9,000 per car on average on these 40,000 cars, it will add another $360 million in losses on top of the losses it has already booked.
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