Uber has received $1 billion loan from Goldman Sachs as loan to support its car lease program for its drivers. The company’s subsidiary unit Xchange leasing offers subprime leases to drivers who are cleared by uber to drive but do not have credit cars to buy cars, it was started in July 2015. This is a part of the company’s vehicular solution program which was developed after the company realized that many drivers has cars too old which did not comply with their standards. Apart from Xchange the company offers discounts when purchasing from certain automakers and deals with financing and rental agencies.
A driver who seeks Xchange program has to pay 250 for lease and weekly payments of 126 is directly deduced in their payments. Xchange offers unlimited mileage, tire rotations, oil changes and air filter replacement. The drivers can return vehicles within two weeks after their first payment. A driver’s credit score will not be damaged by the early termination of the lease instead of the three year term.
Xchange is the last option for people who have bad credit scores even though they are costly than the traditional financing solutions. The risk is with the one who is funding and of course it does not fall on Uber but more on the investors. The $1 billion loan was provided at an undisclosed rate of interest. Apart from Goldman Sachs the other financiers are Citigroup, Deutsche bank, JP Morgan, Morgan Stanley and Sun Trust