Uber Technologies has reportedly sold its subprime auto leasing business in the U.S. to Fair.com, a car marketplace startup.
The Wall Street Journal said the sale of the unit marks the end of an attempt by Uber to get new drivers who don’t have access to vehicles. The unit, called Xchange Leasing, had been searching for a buyer since the summer, as it was losing around $9,000 a car, the newspaper said. The ride-hailing company started winding it down in September, impacting around 500 jobs.
At the same time, Uber also put the unit up for sale. Terms of the deal were not disclosed to the Wall Street Journal. However, the paper did review a document compiled for potential buyers that stated the net book value of its vehicles (more than 30,000) was around $400 million. The deal is expected to close in the early part of the year.
Under the terms of the acquisition, the two companies will work together via an exclusive agreement, with Uber offering would-be drivers access to Fair on its mobile app in the U.S. Uber will acquire an equity stake in Fair, and Fair is giving around 150 jobs to Xchange Leasing staffers.
The transaction comes at a time when Uber is in cost-cutting mode, aiming to reduce expenses on the heels of $2.52 billion in losses during the past six months, which comes as revenue and the number of rides booked increased in the same time period. The ridesharing company is mulling an IPO in 2019 and, under its new CEO Dara Khosrowshahi, is trying to overhaul its troublesome company culture. The Wall Street Journal noted Uber has uploaded a separate stake in a Singapore car leasing business.