Everyone still fails to realize that to pay the $650 monthly car payment you have to earn $900-$950 ...
Look, this isn't rocket science. From the two articles posted in this thread, it's easy to see that the Uber Xchange is catering to those with poor credit history, many of them being immigrants, just as the Payday loan companies who reap 300%+ interest rates on those who are desperate for short term cash and
don't understand how the APR is calculated.
From the articles, these are the most revealing statements:
"Uber knows full well that for many people the Uber gig
lasts just a few months."
"The terms of an Xchange lease run 28 pages."
"...catering to drivers with bad credit is intentional."
"At $600 a month or so for many drivers, that's a hefty lease, leading critics to claim that the terms are predatory."
"Uber also continues to drop its ride prices, making it harder for some drivers to keep up."
"...leases can run far above the actual value of the car."
"There's
a lot of churn among Uber drivers—in 2013, a Princeton researcher found that 30 percent of drivers who started in the first half of that year had stopped working for Uber a year later—and Xchange is a way
to keep new drivers signing up. The company knows those drivers
may not stick around."
"Damascus Durham, 28, got a lease from Xchange in January and picked up a 2016 Chevy Cruze from Team Superstores in Vallejo, California. "I only became an Uber driver for the car," he said.
He pays $200 a week.
He called the program "a scam." "I should be slapping myself," he said. "I've now read the contract."
There is, however, ONE MAIN BENEFIT to the Uber Xchange program:
"Uber's lease is more flexible than most subprime leases, the company said. After the first 30 days of the lease, a driver can return the car to Uber with two weeks notice, without any additional fees, apart from the payments they owe and the $250 they paid up front."
If the driver feels he's in a raw deal and cannot make enough weekly income from Uber to justify the payment, at least there's an option to just return it.
"Xchange has dealerships
reassign cars to other Uber drivers when they get returned. It can be after a few weeks or a few months, and Xchange leases them to drivers with more troubled credit profiles."
The best way for a Uber driver to get into one of these leases is to find a car that's been reassigned, and hopefully negotiate much better terms than the original driver, given the depreciated value of the car.
The Xchange program is designed to "churn and burn" the drivers just like a $5k deposit prop shop is designed to "churn and burn" the traders for commission.
Indeed, the article states the following:
"There's no other way the model can work profitably for Uber."
Here are the links to both articles, just for reference:
http://www.cnbc.com/2016/06/07/uber-wants-to-disrupt-the-auto-leasing-industry.html
http://www.bloomberg.com/news/artic...ase-machine-where-almost-anyone-can-get-a-car
