Uber is now in the business of leasing cars to its drivers. But is it a good deal?
Tiffany Arthur’s career as an Uber driver begins and ends with a used 2015 Chevy Malibu she leased through the company’s subsidiary, Xchange leasing.
“On their website it said only $99 a week. I felt, yeah, I could swing that. Later on, I found out it was more,” explained Arthur.
It was a lot more. Arthur was paying $660 a month to lease a car that had more than 25,000 miles on it. She only had to pay $250 up front. At the same time Chevrolet has an offer to lease a 2016 Chevy Malibu for $199 a month for $500 down and a couple thousand in tax and document fees.
Drivers also need a specific type of car insurance. Arthur said that’s been as high as $250 a month. When you add that to the lease payment, it can be tough to break even. I’ve seen surveys showing Uber drivers making $13-$19 per hour. Splitting the difference at $16 bucks per hour, the lease payments cost drivers around 25% of their pay.
“I’m not happy about it,” said Arthur. “I’m trying to make a living and keep a roof over my head at the same time and a car payment.”
According to the lease contract at the end of 3 years of payments drivers do not have the option to purchase the car. However after 30 days you can also return the car to Xchange with a 14 day notice plus $250. But it’s confusing because the contract also says that drivers may have to pay thousands of dollars to end their lease early.
When we spoke to Tiffany, she had just moved to the Seattle area from Ohio. She was just trying to start a life in the northwest. That car connected her to an income and transportation. Two days later, Tiffany said she couldn’t make the payments. That car and the job are gone.
“They are making their money and I’m barely hanging on,” said Arthur.
In a statement to KIRO 7 Uber said:
“We often hear from drivers that they want to join Uber, but don’t have access to a car or traditional vehicle financing. That’s why we’ve developed a number of new leasing options and vehicle discount programs. With the Xchange Leasing option, drivers choose from a variety of cars and prices and have the flexibility to return their vehicle easily if they change their mind. Our goal is to give drivers options they never had before, and drivers choose what works best for them.”
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