Ride-hailing firm Uber on Tuesday said it would sell vehicles and the existing lease portfolio of its auto-leasing business Xchange Leasing to startup digital car marketplace Fair. The companies did not disclose financial terms.
“We bought every car in the portfolio that is subject to an active lease agreement,” a Fair spokesperson said.
Fair said it formed a partnership in which it will be the exclusive long-term vehicle leasing partner to Uber in the United States for drivers wanting vehicles for 30 days or longer, reports Reuters.
An illustration picture shows the logo of car-sharing service app Uber on a smartphone next to the picture of an official German taxi sign in Frankfurt
Fair, based in Southern California, said it was buying the lease portfolio through equity and debt secured during its recent funding round.
We have raised capital from a number of investment banks and from strategic investors such as Germany’s BMW and Daimler, Fair Chief Executive Officer Scott Painter told Reuters.
According to a Wall Street Journal report in December, the net book value of Xchange Leasing’s more than 30,000 vehicles was roughly $400 million.
Uber said in September it was closing the auto-leasing business, which had heavy losses. Xchange Leasing started to unwind over the last few months of 2017.
Fair, founded in 2016, matches customers with cars based on what they are able to pay each month. Customers get approved and pay for their car through Fair, which owns the vehicle, and pick up the car at a dealership.