Car leasing startup Fair has acquired the active leasing portfolio of Xchange Leasing, a service Uber first established in 2015 to lease new and nearly-new vehicles to drivers who did not come to the service with their own cars.
The financial terms of the deal are not being disclosed. “We bought every car in the portfolio that is subject to an active lease agreement,” a Fair spokesperson said.
Fair said it formed a partnership in which it will be the exclusive long-term vehicle leasing partner to Uber in the United States for drivers wanting vehicles for 30 days or longer.
Fair, based in Southern California, said it was buying the lease portfolio through equity and debt secured during its recent funding round.
We have raised capital from a number of investment banks and from strategic investors such as Germany’s BMW and Daimler, Fair Chief Executive Officer Scott Painter told Reuters.
According to a Wall Street Journal report in December, the net book value of Xchange Leasing’s more than 30,000 vehicles was roughly $400 million.
Uber said in September it was closing the auto-leasing business, which had heavy losses. Xchange Leasing started to unwind over the last few months of 2017.
Fair, founded in 2016, matches customers with cars based on what they are able to pay each month. Customers get approved and pay for their car through Fair, which owns the vehicle, and pick up the car at a dealership.
It’s not clear how many staff from Xchange Leasing will be joining Fair as part of this deal. There were 500 employees working in the unit under Uber, and reports in December alleged that the number going to Fair will be around 150.