Uber may end its subprime car leasing program in the US

Uber is planning to shut down Xchange Leasing, its US subprime car leasing operation, which could impact as many as 500 jobs in the company, the Wall Street Journal reports.

Uber created Xchange Leasing LLC in 2015 in a bid to disrupt the auto loan industry, however, mounting losses are now forcing the company to reconsider its decision.

Originally predicted to lose $500 per vehicle on average, Xchange’s managers recently informed Uber executives that the losses were actually closer to $9,000 per car — around 18 times more than the company expected, in addition to being about half the sticker price of a typical leased vehicle. Hence, the plans to shut down.

Citing sources, the report said that the company aims to close or sell most of the business by the end of the year.

Xchange owns and operates about 40,000 vehicles and has 14 showrooms in the US. While conceived as a way to help new drivers get started, the program also left some drivers shackled with commitments they were unable to meet, Bloomberg reported last year.