Uber is shutting its costly car-leasing unit as new CEO Dara Khosrowshahi pushes the company to focus on businesses that make money. “We have decided to stop operating Xchange Leasing and move towards a less capital-intensive approach,” a spokesperson told CNBC. Xchange, a wholly-owned unit of Uber, had operations in U.S. cities including Los Angeles and Atlanta, and leased cars such as the Ford Focus and Nissan Altima.
Uber’s decision was hardly a surprise. In August, a person familiar with the matter told CNBC that the company would shut down, sell to a partner or consolidate the U.S. leasing business to make it more efficient. Khosrowshahi was named CEO on Aug. 29, replacing co-founder Travis Kalanick, who was ousted in June.
The Wall Street Journal previously reported some details of Uber’s decision. Last month, the Journal reported that Uber executives determined the average loss per vehicle was about 18 times what they had thought. The leasing division saw losses of about $9,000 per car, more than the estimated losses of around $500 per vehicle, the Journal said.
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- Uber ditches its car-leasing business.