Often controversial taxi service, Uber has partnered with Rand Merchant’s Wesbank to give drivers a helping hand by assisting them in obtaining a vehicle lease.
The Uber Vehicle Solutions Program, as it has been dubbed, is valued at R200 million and should go a long way in helping Uber drivers secure a full vehicle maintenance lease especially if they did not previously have access to traditional finance.
Many Uber drivers don’t usually earn enough to qualify for credit and if they do the repayment terms are as they would be for the everyday person on the street. An owner of a few Ubers known simply as Derek was interviewed by Moneyweb in September and explained how little Uber drivers are able to make.
“If you take an average Toyota Corolla, let’s call it R250 000 for a vehicle, over five years you effectively are writing that car off to zero. These guys are driving eight, nine, ten thousand kilometres a month” Derek explained to Moneyweb, “last month five of my guys drove 11 000km for earnings of only R23 000. So your investment does get written off effectively down to zero. So on a cash basis you are net-net almost at zero.”
This is the problem that the partnership with Wesbank may likely solve as drivers would lease a vehicle from Uber and Wesbank.
A driver using the full maintenance lease travelling approximately 5 000km each month would pay as much as R1 710 per week or R6 840 per month inclusive of insurance and tyre wear according to Uber.
Unlike traditional finance the qualification criteria will be based on a driver having a driver rating of 4.70 and completing 1 000 trips over 3 months rather than a traditional credit rating though a credit check through the ITC will be run prior to approval.
Uber has also announced that Hertz, Europcar, Pace and Fleet Data Technologies will be renting approved vehicles to prospective drivers from R5 600 per month and R0.45 per kilometre travelled on a short term basis.
Uber has said that it hopes this new programme will give drivers the best possible chance to start and grow their business, in partnership with Uber.
The full maintenance lease is currently available to qualifying Uber drivers.
Of course, a leasing scheme for Uber drivers finally lays to rest the myth that Uber and its ilk (AirBNB et al) are platforms for “sharing” rather than fancy new forms of booking software for traditional business models. Truly the sharing economy is dead.
[Image CC by 2.0 – Jason Tester Guerrilla Futures]