January 30, 2018 — Fair announced this morning a strategic partnership with Uber along with the acquisition of the lease portfolio of the ride-hailing firm’s XChange Leasing program. As part of the agreement, Fair will become Uber’s exclusive U.S.leasing partner for drivers leasing vehicles for a month or longer.
Financial terms of the acquisition were not disclosed, but earlier media reports indicated the value of Uber’s 30,000 vehicle fleet at about $400 million. Uber shut down its leasing program late last year due to heavier than expected losses — as high as $9,000 a vehicle.
Fair, an online used vehicle leasing/subscription service, approves customers and matches them with appropriate vehicles based on what they can afford monthly. Customers apply by uploading their driver’s license and banking information via a mobile app. They can return the vehicle at any time due to fact there are no long term leases or loans.
Fair, which is partnering with dealers to source the inventory, buys the vehicle from the dealer once a customer selects and is approved for the specific vehicle. The originating dealer has the right of first refusal to purchase the vehicle once it is returned.
Company executives shared details of the pending deal with TBR during the Los Angeles Auto Show in early November and indicated Fair was involved in more investment discussions in addition to the more than $1 billion in debt equity financing and investment announced last fall. (To read more, click Observations on Fair’s Recent $1 Billion Capital Raise). Look for a possible international play to be announced later this year.
Scott Painter, who founded TrueCar and CarsDirect, started Fair in 2016 with former BMW finance exec and Tesla board member and vice president of finance Georg Bauer. The company officially launched in September 2017 and is active in Los Angeles, San Francisco and San Diego. But it should expand quickly to other markets this year fueled by the deal with Uber and investment from the Penske Automotive Group, the nation’s second largest dealer group.