On Wednesday, Uber announced it is shutting down its U.S. auto-leasing business Xchange Leasing. In 2013, the company partnered with GM, Toyota, and several unnamed financial institutions to launch a leasing program that would reduce drivers’ monthly payments and get them on the road faster. Uber later decided to cut the intermediaries and directly lease to drivers through Xchange Leasing, a program it started in 2015.
Now, Uber’s new CEO Dara Khosrowshahi appears to be willing to cut Uber’s losses by simply ceasing operations. Xchange Leasing is a wholly owned unit of Uber. It has operations in many cities, including Los Angeles and Atlanta, and leased cars such as the Ford Focus and Nissan Altima.
“We have decided to stop operating Xchange Leasing and move toward a less capital-intensive approach,” an Uber spokesperson told Reuters.
The Xchange Leasing business, which currently has about 40,000 vehicles and 14 showrooms in the United States, had previously attracted interest from capitalists who were considering buying it outright.
At the time, Uber signaled that it was willing to scale down the business after The Wall Street Journal reported that the company was losing an average $9,000 per vehicle. However, after Travis Kalanick’s resignation as CEO, the company has had a pretty rough patch. Learning from old mistakes, Uber is now taking a new look at some of its more cash-losing enterprises under the brand name and is working toward becoming more financially responsible.
Around 500 people could be affected by the shutdown, which is about 3 percent of Uber’s 15,000-employee workforce. The company says it plans to help out as many employees as it can with résumé building, interviewing skills and recruitment efforts. Not everyone will lose his or her job, however. Some of those employees could be shifted to Uber’s customer service call centers or other departments that require manpower. The company also plans to extend its departments and is currently working tirelessly on damage control for its reputation, while battling multiple lawsuits, federal investigations and a damaged working environment.