Over the past year Uber has signed up over 40,000 drivers for an Xchange lease, and while the program was definitely helpful for a lot of drivers, it was also very expensive and very controversial. You guys may have seen the news, but recently Uber announced that they were getting rid of the Xchange Leasing program. Today we’re going to talk about what happened with Uber Xchange Leasing.
Watch my video to get the story on the fall of Xchange leasing, and read the video transcript below if you prefer to read.
Uber lost massive amounts of money on each car
It turns out that they’re actually losing something like $9,000 on each car. I guess if you do a little quick math, 40,000 drivers, $9,000, I think that’s like $360 million. I don’t know, maybe someone can check my math and let me know if I’m right or not, but basically someone messed up and Uber turns out that they were losing a lot more on these exchanges lease vehicles than they figured.
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This was a super popular program. 40,000 drivers signed up despite how expensive it was and despite the terms. If you guys need a quick recap, obviously it’s no longer available, but it was about $120 to $180 a week where drivers could lease a vehicle, and it was very flexible. There was unlimited mileage. The minimum period was 1.5 months and then you could return it with just a two week notice. Only $250 deposit upfront. Very flexible terms, unlimited mileage, but expensive. I think what really happened is that a lot of people ended up using it and they lost a lot more money.
What happens to drivers who have an Xchange lease?
You can actually keep that car. If you have an Xchange Lease today, you can keep that car and going forward you’ll be able to drive it just like normal, still have unlimited mileage, still get the maintenance. Uber is at least keeping it open for people that already have cars.
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But Uber is incentivizing existing Xchange Lease holders to return that car with anything up to $450 VISA giftcard. We’ve seen drivers getting offers for that. So definitely keep an eye out and we’ll see what happens with that in the future, but for now if you’re a brand new driver or someone who needs a vehicle to drive for Uber and Lyft, Uber is no longer offering new exchange leases.
Uber also ended their partnership with Enterprise
They also ended their partnership with Enterprise. Enterprise had a weekly sort of flexible rideshare rental option that was a couple hundred dollars a week also. In just a short time period drivers lost a lot of options because Enterprise was national, not in every city but it was all over the country and Xchange was all over the place. Almost every major Uber city had Xchange Leasing and sometimes multiple options.
Uber still does have partnerships with Hertz though. I know that Hertz just increased their weekly rental fee, but you can find that in some cities and they’re also testing partnerships with Zipcar in Boston and Getaround in San Francisco. We have a full list of the options on our site and I’ll tell you how to get there in a second.
What should you do if you need a vehicle?
The biggest alternative to these programs that are now in no longer in existence is probably going to be the Lyft Express Drive program. We’ve heard similar feedback with Lyft Express Drive as Uber Xchange, so there’s definitely some more research that you want to do there, but really what we’ve seen is there’s not a lot of cars available on Lyft Express Drive. It’s a popular program, so a lot of people want to use it. A lot of people, that means that there’s not a lot of cars always available.
One good pro tip for you guys is that you can always look for cars in nearby Lyft cities. If you’re in Los Angeles for example you can look for Lyft Express Drive car and they’re out of cars in LA, maybe they have cars in Orange County or maybe even San Diego. We know some drivers who have successfully been able to get cars there. That’s an option that you can keep in mind.
Some other local options that you can always look for, we talked about those Uber partnerships that they have at Getaround and Zipcar. There’s lots of those. I won’t mention them all here because they’re sort of on a local basis, but we’ve seen
There’s also third-party companies like Hyrecar and Maven Gig, which allow you to drive for basically any platform you rent directly from them. Heard pretty mixed reviews from Hyrecar. If you go look at some of our articles or look at some of our feedback definitely mixed reviews from owners and renters on Hyrecar, so I would sort of proceed with caution there, but it would be an option. Maven Gig, we don’t know a lot about but it seems very similar vein to a lot of these other programs.
You can even find fleet owners or people who are renting cars out on Craigslist. I mean we know all sorts of drivers who are getting creative, who are sharing cars, renting from their friend or family or parent. There’s lots of options if you really need a car and you don’t have access to one, you can definitely go there. Just make sure that you read through all of these terms, conditions, especially if you’re signing anything, make sure that you’re protected, think about liability and just be smart about it.
We do have a full list of all the different options, vehicle options for a driver, so if you’re looking for a car you can head over to our Uber vehicle marketplace. That’s where we have all the different options, everything that I just mentioned right there.
The ideal situation is still to use your own car
If you got a great deal on a used Ford Fusion Hybrid or some type of really economic car that’s a couple of years old, so you’re not buying it brand new and you get a little depreciation off, and then you go buy it used, maybe you got a great deal on financing or you had the cash saved up to buy it, that’s probably going to be your best bet.
But not everyone has that option. Some people don’t have the money or the credit . I think this is a really big opportunity for one of these third-party companies or Lyft or even Uber if they figure it out and want to give it a second chance to come in here and try to figure out this model, because I think really what we’ve seen is that for drivers who can afford their own car, it’s great to use your own car.
Despite all the negatives, the cost and everything, the success of the Xchange program shows that drivers really like this program because they were using it. I think that’s actually what caused the downfall, is that they used it so much.
From a product design standpoint Uber did a great job with Xchange Leasing because it wasn’t like a normal lease. It had unlimited mileage, included maintenance, it was flexible. It was almost maybe too good for drivers because they ended up losing some money. I think in the future, if they’re more invested in the success of those drivers, I think you probably had a lot of turnover and a lot of drivers who are just driving around aimlessly because they can put unlimited mileage on their car, and frankly, as you guys know from watching the videos, that’s not the best strategy. You’ve got to be a little bit smarter. You want to be a little bit savvy.
Hopefully this little recap of the Xchange Leasing program and now you guys know what to do going forward. If you’re looking for other options, you know where to go on our site. And if you guys do have any questions or comments, please don’t hesitate to leave them below or send us an email. All right, drive safe everyone.
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