Ride hailing service Uber has announced the launch of a new pilot program – Xchange Leasing – through which it will directly lease cars to its UberX drivers.
Uber made the announcement on Wednesday and hopes that the move will help increase the number of drivers signing up for its UberX service.
With Xchange Licencing, Uber is essentially cutting out intermediaries and directly leasing to drivers. The leases will be offered via an Uber subsidiary that will be owned and funded by the company itself.
Earlier, the company had partnered with several financial institutions to roll out a program that facilitated manufacturer discounts and cheaper interest rates from lenders for its UberX drivers. This time around, Uber will handle the finances via its new subsidiary.
Uber said that it will offer drivers more flexibility than traditional auto leasing companies. Driver who participate in Xchange for 30 days will be able to return the car with only a 2 week notice. Further, the program includes unlimited mileage and the lease of used cars with regular maintenance included.
During the pilot program, Uber has said that the leases will be held on its subsidiary’s books. Further, Uber will not be a party to the lease between the driver and subsidiary so any change in driver rates will not affect the terms of the lease.