Uber is looking for expansion, but if drivers buy less cars than estimated by the company during a certain period of time and in certain market, the growth will be delayed. To avoid the sluggish development the Silicon Valley-based ride-hailing app started earlier financing cars to those who are interested to drive for the company. Instalment of the car is said to be deducted from weekly wages of the driver.
In 2015 over 50,000 drivers were offered cars under the scheme and Uber expects the figure to reach 150,000 by the end of 2016.
The cars have been financed by its subsidiary Xchange Leasing. It is capable of offering $1bn credit facility to buy cars and lend those to Uber drivers.
The company meanwhile is also learned to be testing an Advance Pay scheme under which the drivers avail a $1,000 interest-free loan and to be paid back from earnings. To make it available Uber has partnered with lending start-up Clearbanc.
It is to note the interest rates of Clearbanc for other advances to drivers can be high.
Uber was founded some six years ago and since then has expanded rapidly in global market amid encountering resistance from taxi groups and regulators. It operates in over sixty countries and is now the most highly valued private company in Silicon Valley. Its current valuation stands at $68bn.
We may come across at least a dozen more marketing scheme by Uber in near future while it is expanding in more markets. Share your views with fellow readers in the below given comment box.