Uber Technologies Inc.’s plan to consolidate or sell its subprime leasing arm, Xchange Leasing, would be a “smart move,” Grayson Brulte, a consultant and president of Brulte & Co., told Auto Finance News.
However, Brulte thinks it unlikely another company would acquire the unit, because subprime is a business “about to burst.”
Xchange Leasing debuted in July 2015 to encourage drivers to stay on the rideshare platform in order to pay off the their leases.
Xchange has faced several hurdles in the past, including allegations of getting drivers into subprime loans they were unable to repay. Xchange had 40,000 vehicles and 14 showrooms in the U.S. as of yearend 2016.
In India, Uber planned to buy 15,000 new cars and lease them, but temporarily suspended the initiative in December after leasing only a third of that total, according to Reuters.
Currently, Uber — which is valued at $69 billion by investors — is without a permanent CEO, COO, CTO, or CFO. “Whose strategic vision is this?” Brulte asked. “You don’t decide to do something like this and just stop. You keep going … streamlining the business and adding vertical integration.”
