According to The Wall Street Journal, Uber is planning to quit its subprime car-leasing division in US by this year. The company founded under then CEO Travis Kalanick, is losing far more money than planned.
Uber employees are disappointed about an unexpected redundancy, according to a source familiar with company. Being in the car leasing business was difficult than Uber assumed. Around 500 jobs could be affected. Not everyone will face lay-off, some of those employee could be shifted to another role within the company like, customer service call centers.
Uber currently has around 40,000 vehicles, which it leases to drivers. The company had expected to lose around $500 per car but actually is losing around $9,000 per car, which is more than the estimated loss, sources told Bensinger.
Uber launched the U.S. car-leasing service in 2015, investing around $600 million in the business. Right now, Uber have committee of 14 executives. The companylost $2.8 billion in 2016 and trying to recover those losses.
A source familiar with the company said that Uber isn’t planning to completely give-up. In the wake ofTravis Kalanick’s resignation as CEO, the company is trying to take a new turning point and becoming more financially responsible.
Uber is weighing selling off some of Xchange’s assets as well as excluding the number of cities it serves.
Uber has already lost several big executives in recent weeks.
Uber’s head of growth and product, Ed Baker, resigned from the company earlier this month.
The unreliable earnings have made it a harder business to continue, thus leading Uber to consider its overhead management.