Uber is aiming to consolidate its core business by selling off XChange Leasing that has been incurring heavy losses off late.
Uber has got its handoff of its loss-making venture, XChange Leasing. This comes at a time when the ride-hailing firm is witnessing a slide in its valuation as the company attempts to realign its image under the leadership of new CEO Dara Khosrowshahi.
The financial terms of the deal is, however, being kept under wraps though it is known the new owners, Santa Monica-based tech start-up Fair.com is using equity and debt secured during its latest round of funding to acquire XChange Leasing.
Uber had initially started the XChange Leasing venture as a means to provide wannabe Uber drivers to rent cars to serve on the Uber program. On offer are no less than 40,000 cars that can be availed of via 14 dealerships spread across various cities in the US.
However, with the entity making heavy losses, Uber has for some time been considering either selling it off entirely or trim it down to serve in only a few cities where it has been making fewer losses. The decision to eventually sell it off to Fair is reported to have been finalized last December itself.
Fair also said they would be serving exclusively to Uber under a long-term agreement. As such, those who’d like to join Uber but don’t have a car of their own can lease cars from Fair to start off right away.
Fair, on its part, started operations just in 2016 but is reported to be worth $400 million on the back of the latest deal with Uber that landed it ownership of more than 30,000 cars. The company also operates almost entirely via apps where it serves as a meeting ground for customers and cars depending on their budget.
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Uber meanwhile is eager to shrug off the controversies that rocked the company under the leadership and founder Travis Kalanick. Things seem to be getting on track with Dara Khosrowshahi now at the helm who is also keen to see the company go for a public listing in 2019.