Uber has confirmed that it’s selling its car-leasing business, Xchange Leasing, to car marketplace startup Fair.
The ride-hailing giant launched Xchange Leasing back in 2015 as an easier way for prospective Uber drivers to get on the road. Indeed, the Delaware-based subsidiary was built around the flexibility demanded by the “gig economy” — once drivers had signed up to Xchange for a month, they were afforded the freedom of returning the car with just two weeks notice, without any extra costs.
Uber revealed in September that it was closing down the business, with reports suggesting that the company was losing an average of roughly $9,000 per car, and the Wall Street Journal (WSJ) reported in December that Fair would be acquiring the unit. Though the duo have now confirmed the deal, financial terms have not been disclosed, but previous reports pegged the net book value of the cars at around $400 million.
Santa Monica-based Fair is a mobile-first, flexible car ownership platform that lets you take receipt of vehicle and return it whenever you want. The company announced a $1 billion debt/equity funding round last October from notable automotive names, including BMW, so it certainly has enough cash in the bank to fund such a gargantuan deal.
Uber’s dealings with Fair will actually extend beyond the sale of its Xchange Leasing subsidiary. Moving forward, Uber will use Fair’s platform to offer car leases to its drivers across the U.S. as part of an “exclusive long-term” partnership.
“As we progress on our mission to deliver better experiences for drivers, Uber is excited to partner with companies like Fair that have deep domain expertise and innovative solutions,” said Uber CEO Dara Khosrowshahi, in a press release. “We look forward to working closely with Fair to develop thoughtful, customized options for drivers in the U.S.”
The companies also announced that they will work together to develop “customized new offerings that fit the needs of drivers,” with deep integrations between their respective platforms.
“This is the perfect partnership for Fair,” added Fair founder and CEO Scott Painter. “Uber was built on offering drivers flexibility around how and when they work, and we bring that same concept to the way drivers access vehicles.”