Merchant Innovation

Uber Enters Auto Financing

Uber is bridging the gap between the ride services and financial services sectors with the launch of its Xchange Leasing program.

Uber is bridging the gap between the ride services and financial services sectors with the launch of its Xchange Leasing program.

The ride-hailing company announced the pilot program Wednesday (July 29), which will offer Uber drivers an alternative to traditional vehicle leasing options.

"Unlike most multi-year leases that have high fees for early termination, drivers who participate in Xchange for at least 30 days will be able to return the car with only two weeks notice, and limited additional costs. The program allows for unlimited mileage and the option to lease a used car, with routine maintenance also included. These features combine to create a product unlike anything on the market today,” the company said in a blog post.

The program also features discounts from auto manufacturers, like Toyota, GM, Ford, Nissan and Volkswagon, which the company said has saved drivers over $7 million to date. Xchange offers participants access to streamlined financing partnerships and includes a pilot of a weekly rental option, allowing drivers to rent an uberX-eligible car on a weekly basis that comes equipped with insurance and maintenance already included.

Eighteen months ago Uber started its Vehicle Solutions program, designed to assist prospective drivers who wanted to join Uber but did not have access to a qualifying vehicle. Since its launch, the program counts almost 20,000 participants, who have collectively taken home over $200 million driving for Uber, the company said.

The lessons learned through the Vehicle Solutions program — which may have helped shape Xchange Leasing — included details about vehicle needs, how the company connects drivers with useful options, and more insight on when and where people drive. But Uber said the biggest and most clear takeaway was “the key to flexible earnings is flexible financing."

For now, Xchange Leasing is available in three major Californian cities: Los Angeles, San Francisco and San Diego, as well as select cities in Georgia and Maryland. Uber said it plans to expand the pilot program to additional locations soon.

The Xchange Leasing offering is just one of Uber’s latest attempts to help its drivers through offsetting costs.

The company announced last month it would be finance its eligible drivers to receive an Uber gas credit card, allowing drivers to enroll in the Momentum Driver Rewards program known as the Partner Fuel Card, which is powered by FleetCor and MasterCard. The card offers discounts on per gallon prices at participating fuel stations, as well as an automatic 1.5 percent off on fuel purchases everywhere MasterCard is accepted.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 Pay Advances: The Gig Economy’s New Normal, a PYMNTS and Mastercard collaboration, examines pay advances – full or partial payments received before an ad hoc job is completed – including how gig workers currently use them and their potential for future adoption.

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