The US-based ride hailing company, Uber, is selling its US auto-leasing business, Xchange Leasing to a car marketplace startup, Fair.com. The news was first reported by the Wall street Journal, while citing sources familiar with the sale.

Fair.com is a startup that offers customers open-ended leases for “pre-owned” cars through car dealers. The startup was founded by Scott Painter, the former CEO of TrueCar and Georg Bauer, the former Vice President of Finance at Tesla and BMW. The company is trying to revolutionise the car leasing industry by allowing customers to lease cars based on what the amount they are able and willing to spend and also letting them return the car as per their discretion with 5 days notice. The entire car leasing process is carried out through the company’s app.

Uber has been looking for a buyer for the leasing business ever since August. Although Uber did not expect to make a profit on the business since the very beginning, its losses were larger than expected. While it anticipated making a loss of $500 per car, it was in fact making a loss of $9000 per car, according to reports. However, it is unknown how much Fair.com may have spent to acquire the business. Uber will acquire a stake in Fair.com and the startup will become an exclusive partner with Uber, allowing their drivers to lease cars.

With this acquisition, Fair.com will strengthen its position in the startup market. The company tried to acquire Beepi last year, an online used car marketplace start up that had raised $150 million; however, the sale fell through when Beepi had to shut down. In October, Fair raised over $1 billion via venture investments, and loans. The investors included well known backers like BMW’s iVentures, Penske Automotive Group, and Mercedes Benz.

The reports of the sale come as an indicator of major changes taking place in Uber after the company faced a number of scandals in 2017.  Uber however, has declined to comment on the sale.

(Picture courtesy: Businessnewswales.com)