The idea that one could lease a vehicle from Uber, at a significant loss to Uber, then turn around and use that vehicle to drive for Lyft, is absolutely hilarious.
It's the sharing economy.
Uber Gets Run Over by Its Own Subprime Auto Leases
11–20 of 127 posts
Re: Uber Gets Run Over by Its Own Subprime Auto Leases
#12I am not sure to understand.
The example 2014 Toyota Corolla at US$122 per week makes in a 130 weeks lease with Xchange some 122x130= 15,860 US$ and a 2.5 years (high mileage) old Corolla may still have some minimal residual value, let's say US$ 1,500.
I.e. roughly total reimbursement of the list price of the car:
http://toyotanews.pressroom.toyota.com/releases/2014+toyota+...
Assuming that cars in such a situation are bought "in bulk" and thus with a 10, maybe 15% discount, very roughly it should mean that in the US$ 15,860+1,500=17,360 of reimbursement some minimal costs for interests and expenses are included on an initial spent sum of around US$ 16,000/16,500.
So, at least in theory it seems like a "side-business" that is going to make even or maybe loose a few hundred dollars each car (for interests on the loaned money), but this only if everyone keeps the car and pays the leases for the whole period.
Now, you get one of those (and you get one of those because you have no money and no good credit record) and after 25 weeks/6 months you give it back.
You pay US$3,300 (25*122+250).
Xchange has in its hands a six month old car with (say) 20,000 miles on it.That still has a market value, but maybe since you sell it wholesale to some second hand dealer and you only get - say - US$8000/9000.
So, 3,300+8500=11,800
So in this case Xchange seems like having lost - roughly - US$ 4,500 per car, half the US$ 9,000 stated.
There must have been some large avoidance of repayment (and repossession of the cars, etc.) to make that number on average.
Re: Uber Gets Run Over by Its Own Subprime Auto Leases
#13I am not sure to understand. The example 2014 Toyota Corolla at US$122 per week makes in a 130 weeks lease with Xchange some 122x130= 15,860 US$ and a 2.5 years (high mileage) old Corolla may still have some minimal residual value, let's say US$ 1,500. I.e. roughly total reimbursement of the list price of the car: http://toyotanews.pressroom.toyota.com/releases/2014+toyota+... Assuming that cars in such a situation a…
According to the article that is indeed the case because they almost targeted with people who had subprime/no credit.
And... Surprise! There was a reason they didn't have good credit ratings.
Re: Uber Gets Run Over by Its Own Subprime Auto Leases
#14Does this mean there is (or will soon be) a glut of Priuses on the market?
Re: Uber Gets Run Over by Its Own Subprime Auto Leases
#15Uber is playing both sides of the table which is ok if you are profitable overall. But not ok if you are losing money on both sides. Uber will go a full Groupon soon.
Re: Uber Gets Run Over by Its Own Subprime Auto Leases
#16This article seems to ignore the added revenue from a driver having a car and driving people around for Uber. The better metric is probably the average profitability of a driver with a leased vehicle.
They're still subsidizing rides though. This program is paying for the privilege to lose more money!
Re: Uber Gets Run Over by Its Own Subprime Auto Leases
#17I am not sure to understand. The example 2014 Toyota Corolla at US$122 per week makes in a 130 weeks lease with Xchange some 122x130= 15,860 US$ and a 2.5 years (high mileage) old Corolla may still have some minimal residual value, let's say US$ 1,500. I.e. roughly total reimbursement of the list price of the car: http://toyotanews.pressroom.toyota.com/releases/2014+toyota+... Assuming that cars in such a situation a…
Have you factored in the maintenance costs, oil changes, tires, wheel balance, windshield wipers, labors and other Xchange employee related costs? Those add up REAL QUICK.
BMW used to run an industry leading (back then) warranty program the covers the wear&tear of regular maintenance (except tires and a few others) but they eventually decided to discontinue that warranty program since 2015 due to the huge loss on it.
Re: Uber Gets Run Over by Its Own Subprime Auto Leases
#18> A 2014 Toyota Corolla was recently being offered for a term of 130 weeks at $122 a week, totaling roughly $500 a month, according to marketing materials distributed by Uber.
Only Uber could lose money on a $500/month 2014 Corolla lease.
Re: Uber Gets Run Over by Its Own Subprime Auto Leases
#19Does this mean there is (or will soon be) a glut of Priuses on the market?
There is a tidal wave of used cars coming into the used car market due to substantial subprime defaults, including these Uber vehicles.
Re: Uber Gets Run Over by Its Own Subprime Auto Leases
#20I am not sure to understand. The example 2014 Toyota Corolla at US$122 per week makes in a 130 weeks lease with Xchange some 122x130= 15,860 US$ and a 2.5 years (high mileage) old Corolla may still have some minimal residual value, let's say US$ 1,500. I.e. roughly total reimbursement of the list price of the car: http://toyotanews.pressroom.toyota.com/releases/2014+toyota+... Assuming that cars in such a situation a…
Have you factored in the maintenance costs, oil changes, tires, wheel balance, windshield wipers, labors and other Xchange employee related costs? Those add up REAL QUICK. BMW used to run an industry leading (back then) warranty program the covers the wear&tear of regular maintenance (except tires and a few others) but they eventually decided to discontinue that warranty program since 2015 due to the huge loss on it.
I thought it was a "plain" lease with maintenance (and tires, etc.) in charge of the user not a "full service" lease.
If it was the latter, then yes, but it would be "suicide", not even the "perfect world" example where the driver pays every month for the full period can possibly work.
EDIT: Found it, is just "basic maintenance":
https://help.uber.com/h/ba3a48f4-07ae-4836-9d5a-6df170210d6f
>- Oil change and tire rotation every 5,000 miles
>- Cabin air filter replacement every 25,000 miles
It doesn't add up to much anyway.
(as a side note the usual "US madness" about changing oil every 5,000 miles applies here as well).
I believe that when you buy a new Corolla, Toyota gives a 5,000 miles tire rotation and a 10,000 miles oil change included in first two years, BTW.