# Inside Uber’s Auto-Lease Machine, Where Almost Anyone Can Get a Car



## Ca$h4 (Aug 12, 2015)

*Draws parallel with liar loans in mortgage market. Uber deceives.*

*VIDEOS:*

*http://finance.yahoo.com/video/risky-ubers-subprime-loans-000353434.html

http://www.bloomberg.com/news/artic...ase-machine-where-almost-anyone-can-get-a-car*


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## Tim In Cleveland (Jul 28, 2014)

*Bloomberg News spoke to a half dozen drivers who have leases through Xchange. For the most part, drivers saw Xchange as their only way to get a car. Xchange was a solution to Shawn Hofstede's money problems at first.
Hofstede, 30, started driving for Uber in the Dallas-Fort Worth area last year, using his own car. But then, during an accident on his own time, he wrecked the car and was left without the income. "I was literally screwed," he said. Then Uber e-mailed him about its financing options.
He leased a 2016 Toyota Corolla from Xchange in November, paying $155 a week. Two months later, Uber slashed fares nationally. Soon Hofstede had trouble keeping up with his payments. He went from making $200 in a weekend to $140 in a weekend, he said. "It got to the point that I would drive just to meet my payment," he said. "If you were short on your payment for a week it would roll onto the payment for next week. It starts adding up."
Eventually, Hofstede gave up and stopped driving. He said he told Xchange to come get the car several times. That was in February. "I felt trapped, and then I said, 'F--- it,'" he said. "I'm not paying them."
It was no secret where the car was; Uber had installed a GPS tracker on it. For a while, Hofstede left a note on the Corolla that read, "Dear Uber, thanks for coming to pick up the car. Call this apartment, and I'll come out and give you the keys." After two months passed, he stopped putting the note out. One April morning, Hofstede woke up and the car was gone; it had been repossessed overnight.
Bloomberg spoke to five auto-finance experts. Most said the leases are expensive, even predatory, compared with leases available to drivers with good credit. "I'd say the cost is greater than the benefit for your average driver," said Mark Williams, a lecturer at Boston University's business school who reviewed the terms of a blank lease agreement provided by Uber, along with some average weekly lease payments and a driver-reported account. "The terms, the way they're proposed, are predatory and are very much driven toward profiting off drivers rather than to facilitate an increase in drivers."
Uber said that the program isn't meant to generate a profit, but to get more drivers in cars. They said that the lease is structured so drivers can get out of it at any time. Besides unlimited mileage, Uber's lease also includes routine maintenance. The company also said returning the vehicle won't impact a driver's credit score, unlike other financing arrangements.
"They're making it easier to walk away, which is a good thing, but they're making it pretty expensive throughout," said John Van Alst, a leasing expert at the National Consumer Law Center.
The average weekly payment for a lease on a new car was $96 during the last three months of 2015, according to credit agency Experian. That's for everyone with all kinds of credit ratings. A typical 2013 Toyota Camry L through Xchange runs $130 a week, according to Uber.
Xchange leases are generally comparable to the terms of other subprime and deep-prime leases, experts said. That means leases can run far above the actual value of the car. Leases are growing in popularity over other vehicle-financing options. During the fourth quarter of 2015, 34 percent of new financing came in the form of a lease, according to Experian, up from just 24 percent in the same quarter of 2010.
Many of those leases are targeted at drivers with bad credit, according to Chris Kukla, executive vice president at the Center for Responsible Lending. "Subprime auto is sort of the new hot place to get into the securities market," he said. "There are some similar things going on in the auto market that look like a lot of what's been going on in the mortgage market pre-crash."
In a statement sent by Uber, Chapin said: "Many Americans don't have enough cash on hand to buy a car. Many others could be denied leases or charged high rates due to their credit quality, and could owe thousands of dollars in penalties if they break the contract early. Xchange provides access to high quality cars with no restrictions on mileage (unlike most leases) and the ability to break the lease early with minimal fees." 
William Black, an economics and law professor at the University of Missouri-Kansas City, took issue with Uber's policy of tapping income directly. Black, a loan expert, said if Uber wanted to look out for drivers' interests, the company could develop a financing program through a credit union. (Credit unions are controlled by the people who invest with them, meaning that credit unions have a vested interest in giving out loans that are friendly to their customers.) Otherwise, he said, "There are always possibilities for very substantial conflicts."*

*Xchange is just one part of Uber's plan* *to create new ways for drivers to pay for a car.* In addition to its new financing deal with Toyota, Uber has also struck partnerships with Cox Automotive, the owner of Kelley Blue Book and Autotrader.com, to offer another rental program in cities like Atlanta and Dallas, Texas. The company previously worked with Santander Consumer USA to provide subprime auto leases to Uber drivers; that ended in July 2015.

Xchange's new credit facility will transfer much of the financial risk from Xchange to the banks who are participating in the deal. Besides Goldman Sachs, that includes Citigroup, Deutsche Bank AG's New York branch, JP Morgan, Morgan Stanley and Sun Trust, according to a person familiar with the matter. The terms of the deal were not disclosed but the banks' profit is limited to their returns on the loan to Xchange, not the performance of the leases.

Lyft is also growing through car rentals. The company is working with investor General Motors to rent Lyft drivers cars in Chicago. When GM invested $500 million in Lyft, the potential to finance Lyft drivers' cars was a major selling point of the deal.

"We're not making a profit off of the program. GM is making money," said David Rust, who runs Lyft's financing programs. "We're a middle man. Drivers get on the road."

Uber declined to share how many leases they've provided through Xchange. There's a lot of churn among Uber drivers-in 2013, a Princeton researcherfound 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.

Two weeks after he picked up the car, Uber deactivated his driver account for no specific reason, he said. Durham is now struggling to make payments. Every month, he calls Uber to pay over the phone. If he keeps the lease to the end of its term, he'd end up paying Uber about $31,200. To buy the car, he'd need to pay Uber another $6,000 to cover the car's residual value, he says. The fair purchase price of the car, according to Kelley Blue Book, is $16,419.

Initially, Durham was happy about the lease. "It's great; I get a brand-new car, and now that I don't have to drive Uber people around, I'm not putting those miles on my brand-new car," he said. In a follow-up conversation, Durham's thinking had shifted. He now plans to return the Chevy Cruze and buy a car. He called the program "a scam." "I should be slapping myself," he said. "I've now read the contract."

Muhanad K. started driving for Uber in September 2014 after having fled his war-torn home country. (He declined to share his full name or the country out of fear he could endanger his family abroad.) After a few months, his car broke down.

With a subprime credit score hovering around 570, Muhanad didn't think he could get another car. That's when he turned to Xchange. He pays Uber $183 a week for a 2015 Prius. If Muhanad sticks with the lease for three years, he'll end up paying Uber $28,798. Kelley Blue Book puts the fair purchase price of a 2015 Toyota Prius at $21,985.

To afford it, Muhanad started pulling longer shifts. Six days a week, he'd sign in to the Uber app at 7 a.m. and work until 11 p.m., limiting himself to a two-hour break.

"I just wanted to make money," he said. "I come from a place where I survived hell, so this is nothing. But most people probably would not be able to handle this kind of stress


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## Tim In Cleveland (Jul 28, 2014)

*In June 2015, Brandie Schmitt, 24, found herself broke in Los Angeles with what she called a "terrible" credit score. Five years earlier, a seizure put her in the hospital. Medical bills piled up, along with student debt for classes she never attended. She worked at Papa John's for a while, but then her hours got cut, and anyway, the two hour plus-bus ride to work was killing her.*
After dropping $250 up front for her lease of a 2015 Honda Civic, she pays $160 a week to Xchange. If she keeps the car for the full three-year term, she'll ending up paying Uber $25,210. The Kelley Blue Book fair purchase price for a new 2015 Honda Civic SE in Los Angeles is $18,142. Schmitt said that she'll need to pay Uber another $5,000 or so to buy the car if she wants to keep it at the end of her lease.
Schmitt was referred to Bloomberg News by Uber. She drives about 25 hours a week. In one week in May, she earned $604 for 28 hours of work, she said-a slightly better-than-average week. Uber took $160 for the car directly out of her paycheck, leaving her with $444. "It's been building my credit," she said. "It's expensive &#8230; but that's because my credit isn't that great."
Uber's program is willing to take bigger risks on lease applicants than most traditional leasing programs, the company said. It has more reason to believe that someone will be able to pay them back, because they'll be making money driving for Uber, and the company gets their money before it pays the driver.
Chapin said catering to drivers with bad credit is intentional. "Just as Uber is changing the nature of car ownership for riders, it's changing the nature of car ownership for drivers," he said.


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## uberdriverfornow (Jan 10, 2016)

I didn't qualify. And I thank the Lord I didn't. I saved up for a larger down payment to offset my average credit and I'm living the good life of no predatory lease.


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## Uberbrethren (Feb 25, 2016)

The article states: "Chapin said catering to drivers with bad credit is intentional. 'Just as Uber is changing the nature of car ownership for riders, it's changing the nature of car ownership for drivers,' he said."

It's one thing to have a service that alters the decision for a consumer purchase but it is another to make a usurious loan to a vulnerable individual altogether.


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## Ca$h4 (Aug 12, 2015)

*Uber is in the sub-prime auto business*
*Company needs drivers badly, offers high-fee leases*

*http://www.houstonchronicle.com/bus...is-in-the-sub-prime-auto-business-7955561.php*

Uber is having a hard time finding enough people with cars willing to work for them.

To solve that problem, the company has raised $1 billion to start Xchange Leasing, a sub-prime lender with the sole purpose of getting poor people into new cars so they can drive for the ride-hailing service.

If you've got a license and are willing to drive, Uber will hook you up with a new car, no matter how bad your credit. To make sure you make your payments, though, Uber will automatically deduct them weekly from what you earn as a driver. If you don't drive enough, or you fail to make your lease payment, Xchange has folks to take the car back.

As for the terms, well, here's what Mark Williams, a lecturer at Boston University's business school told Bloomberg News: "The terms, the way they're proposed, are predatory and are very much driven toward profiting off drivers."

Uber, which is now valued at $62.5 billion, can only make money if tens of thousands of people sign up as drivers. That's because 50 percent of Uber drivers quit after just six months.

Xchange wants to address that by striking deals with automakers and Wall Street backers to lease 100,000 cars to new Uber drivers. Uber says they are providing a pathway for poor people to buy a new car.

Unfortunately, Xchange Leasing sounds more like a payday-loan racket built into a company store. The lease increases the company's control over the driver, who Uber still insists is nothing more than an "independent" contractor.

How is someone independent when Uber controls access to customers, sets the billing rates, demands a minimum number of hours and owns the car and the predatory lease on it?

Some amoral, Ayn Rand-loving sociopaths in Silicon Valley will insist that drivers should know what they are doing when they sign up. After all, the terms of service are sufficiently explanatory.

But here's the truth about human beings: not all of us are equally-well educated, and not everyone understands lease terms. We know from exploitative lending practices throughout history that poor people are the most likely to be suckered, often because they are so desperate to escape poverty that they will try almost anything.

Uber initially claimed to be part of the "sharing" economy, a marketing term that masks the unsavory nature of these exploitative business plans. But as we learn more about what companies like Uber must do to enrich the venture capitalists who back them, it becomes clear that old-fashioned exploitation of the desperate is at the heart of the enterprise.

Companies can throw around words like innovation all they want, but if recruitment means taking advantage of the desperate, then there's something wrong. Sometimes people forget that not everything that is shiny and new is necessarily good.









* Chris Tomlinson *
Business Columnist


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## Clx (Apr 13, 2016)

I'm still not understanding why people in low tier markets are buying new cars for uber...


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## LAuberX (Jun 3, 2014)

It's like payday loans, rent-a-center, rent-a-wheel, Aaron's... high weekly payments, easy to qualify.

It's easy to get "stuff" if you are willing to pay 2-4 times market value for it! 

Uber has just tapped into that mind set, "get a new car" "make life changing money" "work when you want"

sounds good, right?


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## Caplan121 (Jun 15, 2015)

You think the xchange leasing payments are higher due to not having mileage caps? I mean they have to understand that drivers are going to put alot of wear and tear on these vehicles so they have to make their profit early before the car loses too much value when the driver goes to turn it in.


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## Ca$h4 (Aug 12, 2015)

*Uber's Subprime Auto Leases Sound Awfully Predatory*

*http://www.citylab.com/commute/2016/06/uber-subprime-auto-leases/485480/*


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## observer (Dec 11, 2014)

Sounds like another class action lawsuit coming soon.


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## tohunt4me (Nov 23, 2015)

Tim In Cleveland said:


> *Bloomberg News spoke to a half dozen drivers who have leases through Xchange. For the most part, drivers saw Xchange as their only way to get a car. Xchange was a solution to Shawn Hofstede's money problems at first.
> Hofstede, 30, started driving for Uber in the Dallas-Fort Worth area last year, using his own car. But then, during an accident on his own time, he wrecked the car and was left without the income. "I was literally screwed," he said. Then Uber e-mailed him about its financing options.
> He leased a 2016 Toyota Corolla from Xchange in November, paying $155 a week. Two months later, Uber slashed fares nationally. Soon Hofstede had trouble keeping up with his payments. He went from making $200 in a weekend to $140 in a weekend, he said. "It got to the point that I would drive just to meet my payment," he said. "If you were short on your payment for a week it would roll onto the payment for next week. It starts adding up."
> Eventually, Hofstede gave up and stopped driving. He said he told Xchange to come get the car several times. That was in February. "I felt trapped, and then I said, 'F--- it,'" he said. "I'm not paying them."
> ...


By the time Uber runs our cars into the ground for pennies,it will be the only way WE can get a car also.


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## backstreets-trans (Aug 16, 2015)

LAuberX said:


> It's like payday loans, rent-a-center, rent-a-wheel, Aaron's... high weekly payments, easy to qualify.
> 
> It's easy to get "stuff" if you are willing to pay 2-4 times market value for it!
> 
> ...


Uber can guarantee themselves payment by sending high dollar fares to the driver that owe them money. It's like they're paying themselves. Uber is like the online poker craze where they can set the system up to do exactly as they want. This guy owes us a couple hundo so we'll send him a 3.0 surge trip to the airport. Cha-ching a quick hundred coming right back to us. Who needs driverless cars when they can set the system up how they want.


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## tohunt4me (Nov 23, 2015)

Uberbrethren said:


> The article states: "Chapin said catering to drivers with bad credit is intentional. 'Just as Uber is changing the nature of car ownership for riders, it's changing the nature of car ownership for drivers,' he said."
> 
> It's one thing to have a service that alters the decision for a consumer purchase but it is another to make a usurious loan to a vulnerable individual altogether.


UBER COMPANY STORE

MASTER HAS YOUR BACK.


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## tohunt4me (Nov 23, 2015)

Next,with Uber teaming with Wal-Mart . . .just get your groceries now,deduct them from your next check.
Drive
Drive 
Drive 
You owe Uber.


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## backstreets-trans (Aug 16, 2015)

tohunt4me said:


> Next,with Uber teaming with Wal-Mart . . .just get your groceries now,deduct them from your next check.
> Drive
> Drive
> Drive
> You owe Uber.


I thought I heard somewhere that they were trying to start a relationship with walmart to deliver groceries. You know walmart shoppers are big tippers. haha. Uber has a whole team that brainstorms to comes up with crappy jobs that they con drivers into doing for practically nothing.


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## tohunt4me (Nov 23, 2015)

backstreets-trans said:


> I thought I heard somewhere that they were trying to start a relationship with walmart to deliver groceries. You know walmart shoppers are big tippers. haha. Uber has a whole team that brainstorms to comes up with crappy jobs that they con drivers into doing for practically nothing.


Rolling up to the trailer park with a trunk load of Pabst Blue Ribbon and BBQ potatoes chips.
Getting rated 2 because Wal Mart sent stale chips.
Swipe that gubbment EBT card.


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## AllenChicago (Nov 19, 2015)

Caplan121 said:


> You think the xchange leasing payments are higher due to not having mileage caps? I mean they have to understand that drivers are going to put alot of wear and tear on these vehicles so they have to make their profit early before the car loses too much value when the driver goes to turn it in.


That's what I was thinking too. Normally, you have 12,000 annual miles built into your lease. You pay DEARLY for going over that 12,000.


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## AllenChicago (Nov 19, 2015)

backstreets-trans said:


> I thought I heard somewhere that they were trying to start a relationship with walmart to deliver groceries. You know walmart shoppers are big tippers. haha. Uber has a whole team that brainstorms to comes up with crappy jobs that they con drivers into doing for practically nothing.


FYI, there's now a *Walmart discussion*, here in the NEWS section..
Direct Link: *https://uberpeople.net/threads/walm...-lyft-to-test-grocery-delivery-service.82106/*


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## Fireguy50 (Nov 23, 2015)

LAuberX said:


> It's like payday loans, rent-a-center, rent-a-wheel, Aaron's... high weekly payments, easy to qualify.
> 
> It's easy to get "stuff" if you are willing to pay 2-4 times market value for it!
> 
> ...


*Yeah! *
I have 2 knees and a kidney if I miss payments, but what do I do if I miss a fourth payment?


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## Fireguy50 (Nov 23, 2015)

tohunt4me said:


> UBER COMPANY STORE
> 
> MASTER HAS YOUR BACK.


https://en.m.wikipedia.org/wiki/Company_scrip


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## SEAL Team 5 (Dec 19, 2015)

tohunt4me said:


> Next,with Uber teaming with Wal-Mart . . .just get your groceries now,deduct them from your next check.
> Drive
> Drive
> Drive
> You owe Uber.


Damn, I did really good this week. I drove 1262 miles and now I only owe Uber $218.63. Thanks Uber, you have revolutionized the transportation industry. Not only do you get money from the customer, but the drivers pay you as well. Who said you can't teach an old dog a new trick?


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## tohunt4me (Nov 23, 2015)

Fireguy50 said:


> https://en.m.wikipedia.org/wiki/Company_scrip


Turn in your brass,get turnips.
Thought I was joking ?
My grandpa grew up on a plantation with a company store.
You never left with money.


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## tohunt4me (Nov 23, 2015)

AllenChicago said:


> FYI, there's now a *Walmart discussion*, here in the NEWS section..
> Direct Link: *https://uberpeople.net/threads/walm...-lyft-to-test-grocery-delivery-service.82106/*


Yessssss . . .
And Mark my words as to where it leads.


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## tohunt4me (Nov 23, 2015)

Fireguy50 said:


> *Yeah! *
> I have 2 knees and a kidney if I miss payments, but what do I do if I miss a fourth payment?


RECRUIT YOUR FRIENDS KIDNEYS FOR $500.00

* kidney must be viable.
** kidney must not be rejected by recipient within the first 30 days.


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## I_Like_Spam (May 10, 2015)

Ca$h4 said:


> *Uber is in the sub-prime auto business*
> *Company needs drivers badly, offers high-fee leases*
> 
> *http://www.houstonchronicle.com/bus...is-in-the-sub-prime-auto-business-7955561.php*


Subprime lenders have a tough time staying in business. Mercury Finance went belly up. So did the sub primers that Danny Marino was shilling for a dozen years or so ago. The problem is they can't charge enough interest money to make up for the number of defaults that they'll have.

Uber got into this racket, because they have been having some difficulty in getting enough drivers with qualifying cars.

Uber made a decision to use their technology to displace traditional livery operations, instead of just selling the tech to the cab concerns. I don't know whether it was because they had no respect for the work of cab drivers and saw it as easy money, or if it was just a pathological hatred of taxi cabs, but the die has been cast.


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## tohunt4me (Nov 23, 2015)

I_Like_Spam said:


> Subprime lenders have a tough time staying in business. Mercury Finance went belly up. So did the sub primers that Danny Marino was shilling for a dozen years or so ago. The problem is they can't charge enough interest money to make up for the number of defaults that they'll have.
> 
> Uber got into this racket, because they have been having some difficulty in getting enough drivers with qualifying cars.
> 
> Uber made a decision to use their technology to displace traditional livery operations, instead of just selling the tech to the cab concerns. I don't know whether it was because they had no respect for the work of cab drivers and saw it as easy money, or if it was just a pathological hatred of taxi cabs, but the die has been cast.


A cab driver pissed Travis off as a youngster.

Now,they must ALL pay.


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## ResIpsaUber (Dec 27, 2015)

Tim In Cleveland said:


> 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.
> 
> Two weeks after he picked up the car, Uber deactivated his driver account for no specific reason, he said. Durham is now struggling to make payments. Every month, he calls Uber to pay over the phone. If he keeps the lease to the end of its term, he'd end up paying Uber about $31,200. To buy the car, he'd need to pay Uber another $6,000 to cover the car's residual value, he says. The fair purchase price of the car, according to Kelley Blue Book, is $16,419.
> 
> Initially, Durham was happy about the lease. "It's great; I get a brand-new car, and now that I don't have to drive Uber people around, I'm not putting those miles on my brand-new car," he said. In a follow-up conversation, Durham's thinking had shifted. He now plans to return the Chevy Cruze and buy a car. He called the program "a scam." "I should be slapping myself," he said. "I've now read the contract."


I don't know that I would have used this guy as an example. He sounds like he purposely was manipulating the system by getting a car that he wasn't able to pay for, non-payment of which will, apparently, result in a repo only and that he can run into the ground with unlimited miles in the meantime.


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## tohunt4me (Nov 23, 2015)

ResIpsaUber said:


> I don't know that I would have used this guy as an example. He sounds like he purposely was manipulating the system by getting a car that he wasn't able to pay for, non-payment of which will, apparently, result in a repo only and that he can run into the ground with unlimited miles in the meantime.


" we must SIGN the contract,to know what's in it ". . . .oh Babylon!G-7 of the " seven hills"


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## stuber (Jun 30, 2014)

backstreets-trans said:


> Uber can guarantee themselves payment by sending high dollar fares to the driver that owe them money. It's like they're paying themselves. Uber is like the online poker craze where they can set the system up to do exactly as they want. This guy owes us a couple hundo so we'll send him a 3.0 surge trip to the airport. Cha-ching a quick hundred coming right back to us. Who needs driverless cars when they can set the system up how they want.


This is a likely scenario. They manipulate their app in any manner that suits them. Btw, the concept is not a new one. Any limo/taxi fleet operator will tell you. They always feed their lease drivers with trips before any trips are offered to farm out drivers.


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## BurgerTiime (Jun 22, 2015)




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## Old Rocker (Aug 20, 2015)

On another thread someone started regarding the same article, I commented on the following...

Yes, if you keep the car 36 months you owe a residual....BUT ONLY IF YOU DECIDE to keep the car. MOST leases, even conventional leases are exactly the same.

YOU DON'T HAVE to keep the car for 36 months. You can turn it in any time after the first 30 days with a two weeks notice, pay the $250 disposition fee, and walk away with no hit on your credit. I'm not aware of any other lease program that allows this. The guy who couldn't make payments and parked his car waiting for Uber to repossess it is a fool. All he had to do was call in and cancel it and drive it back to the dealership after two weeks. Duh. 

Probably the second most common issue mentioned on these forums, after low rates, is depreciation. You don't have to worry about depreciation with an Xchange lease and can drive unlimited miles - something you can't do with a conventional lease. They'll even do free oil changes and tire rotations for the driver. In fact, you can come out ahead because YOU CAN STILL DEDUCT the 54 cents a mile, so Uncle Sam is basically paying you for depreciation you are not accruing. Also, the interest on a lease is a tax deductible business expense.

I ran some numbers and came up with a figure that an Xchange lease has about a 25% premium over a conventional lease. This premium is offset by unlimited miles, a walk away clause, tax benefits, and free oil changes and tire rotation.

I'm not an Uber shill. I simply saw a situation where bogus information is being spread and am providing the straight scoop.

I recommend that anyone looking into Xchange leasing weigh their options carefully, and go to at least three dealerships to be sure you're not getting screwed over.

(INSIDE SCOOP! Xchange leasing at a dealership is an independent group. They buy their own cars that are separate from the dealer inventory. )


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## Gabriel Quijas (Feb 10, 2016)

With all that said ^ remember never let the dealership say you HAVE TO GET A BRAND NEW CAR.


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## stuber (Jun 30, 2014)

Old Rocker said:


> On another thread someone started regarding the same article, I commented on the following...
> 
> Yes, if you keep the car 36 months you owe a residual....BUT ONLY IF YOU DECIDE to keep the car. MOST leases, even conventional leases are exactly the same.
> 
> ...


Good post. So, could I (a commercial operator with an inactive Uber account) get an Xchange lease on a used Chevy Suburban? I'd reactivate the Uber and do a token job here and there. Then, insure the vehicle on my own, take the IRS write off, put unlimited mileage on the car, get free oil changes and tires rotations, then walk away? Sounds great. I'll just trade out for another one each year.


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## tohunt4me (Nov 23, 2015)

stuber said:


> Good post. So, could I (a commercial operator with an inactive Uber account) get an Xchange lease on a used Chevy Suburban? I'd reactivate the Uber and do a token job here and there. Then, insure the vehicle on my own, take the IRS write off, put unlimited mileage on the car, get free oil changes and tires rotations, then walk away? Sounds great. I'll just trade out for another one each year.


Except,they won't offer suburbans on the plan.
Only crap the dealer can't move . . .


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## stuber (Jun 30, 2014)

So much for that. Loves me the Burb.


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## Old Rocker (Aug 20, 2015)

stuber said:


> Good post. So, could I (a commercial operator with an inactive Uber account) get an Xchange lease on a used Chevy Suburban? I'd reactivate the Uber and do a token job here and there. Then, insure the vehicle on my own, take the IRS write off, put unlimited mileage on the car, get free oil changes and tires rotations, then walk away? Sounds great. I'll just trade out for another one each year.


No, no Suburbans on the list. I think it maxes at $23k for new cars and $18k for used.


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## Old Rocker (Aug 20, 2015)

tohunt4me said:


> Except,they won't offer suburbans on the plan.
> Only crap the dealer can't move . . .


The Xchange vehicles are separate from the dealer inventory. Xchange is like a store within a store, they just base out of certain dealerships. The oldest vechicle I looked at was a 2014. I don't know where they get them from... repos, rentals, trade-ins, liquidators, whatever. Most of what I saw were in pretty good condition, but most had quite a bit of mileage on them for the year, like 2015 with 45k miles, so I'm assuming they were rentals. They might also be trade-ins Xchange bought from the hosting dealership.


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## Old Rocker (Aug 20, 2015)

stuber said:


> Good post. So, could I (a commercial operator with an inactive Uber account) get an Xchange lease on a used Chevy Suburban? I'd reactivate the Uber and do a token job here and there. Then, insure the vehicle on my own, take the IRS write off, put unlimited mileage on the car, get free oil changes and tires rotations, then walk away? Sounds great. I'll just trade out for another one each year.


Oh, regarding the trade out in a year, that's probably a good idea once the vehicle reaches the end of it's warranty.


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## Old Rocker (Aug 20, 2015)

I forgot to mention in my long post above that there is no $2-3000 down payment and no TTL.


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## Another Uber Driver (May 27, 2015)

www.fool.com/investing/2016/06/05/uber-is-now-actively-preying-on-the-poor.aspx?source=yahoo-2-news&utm_campaign=article&utm_medium=feed&utm_source=yahoo

Here is something related from Motley Fool.


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## dnlbaboof (Nov 13, 2015)

its actually not a bad plan, no wear and tear, if you make 1000 bucks a week or so or more, its pretty good, if you drive 40 plus hours its not that bad and you can quit anytime. unlimited mileage


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## Another Uber Driver (May 27, 2015)

dnlbaboof said:


> its actually not a bad plan,
> 
> *if* you make 1000 bucks a week or so or more
> 
> *if* you drive 40 plus hours


 (emphasis added)

Those can be big "if"s.

That stated, if you go into it knowing what it is all about, knowing what to expect, knowing how to play it and it fits what you want to do with it it is, in fact, tolerable. Sadly, those in the foregoing category are in the minority.


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## dirtylee (Sep 2, 2015)

Has anyone ever shared their car lease? I'm not talking about sharing accts but the car instead. With set schedules & utilizing the car 14-16 hrs a day, that bad boy is worth every penny of the lease payment.


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## Null (Oct 6, 2015)

dirtylee said:


> Has anyone ever shared their car lease? I'm not talking about sharing accts but the car instead. With set schedules & utilizing the car 14-16 hrs a day, that bad boy is worth every penny of the lease payment.


I haven't heard of anyone doing it, but it would be a good idea if you understand your risks and costs.

However, unless you know (Even then) the person you're sharing with there are some liability issues. Auto damage, insurance claims, red light tickets, etc. Become a little(lot) more complicated.

There's only one person that's bound to the contract so you'd not only have to split the lease cost on a prorated basis but also charge enough premium on the top to cover maintenance, repairs and consumables.

You also then could have schedule conflicts as you'll have to figure out who gets the car on premium rideshare days, etc. And the price would need to fluctuate accordingly.

If the car is ever written off then nobody can drive.

Basically the person who's on the lease would be a 1 car fleet rental agency and would need to budget/plan as such.


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## Old Rocker (Aug 20, 2015)

My possibly flawed understanding is that it's 'ok' IF the other person is on your Uber account AND covered under your insurance.


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## LA Cabbie (Nov 4, 2014)

I_Like_Spam said:


> Uber made a decision to use their technology to displace traditional livery operations, instead of just selling the tech to the cab concerns. I don't know whether it was because they had no respect for the work of cab drivers and saw it as easy money, or if it was just a pathological hatred of taxi cabs, but the die has been cast.


It's both.


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## UberLaLa (Sep 6, 2015)

Old Rocker said:


> I forgot to mention in my long post above that there is no $2-3000 down payment and no TTL.


You are right in many ways on all of this. Essentially, Uber/Xchange is hedging their bets that if Driver does put high miles on the leased vehicle it is paid for in the higher cost lease. And, your point of not having to put down an initial $2k-$3k should be factored in. Bottom line, for a lease that can be _returned_ with no negative to driver (with two week notice and payment for such) it's not too bad of a bad deal.


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## SomeDrivingGuy (May 10, 2016)

Depends really. I know drivers that lease and rent should do at least 8 hours per day. They should be able to make an extra 500 on top. 

I'm better off paying minor repairs for under 1k a month on my personal vehicle.


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## Null (Oct 6, 2015)

Old Rocker said:


> My possibly flawed understanding is that it's 'ok' IF the other person is on your Uber account AND covered under your insurance.


Correct, potentially. Would you be OK with your insurance rates going up due to a policy claim?

Does your insurance cover renting out your car for commercial purposes?

You could potentially be dragged into court for certain civil/criminal activity of the other driver.


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## Old Rocker (Aug 20, 2015)

Null said:


> Correct, potentially. Would you be OK with your insurance rates going up due to a policy claim?
> 
> Does your insurance cover renting out your car for commercial purposes?
> 
> You could potentially be dragged into court for certain civil/criminal activity of the other driver.


I found out for certain today that only the lessee on the contract is allowed to use the Xchange vehicle.


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## Old Rocker (Aug 20, 2015)

I'll also add that I found out a driver can only get one Xchange lease every 36 months, so you can't change vehicles every year or whatever.


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## GlenGreezy (Sep 21, 2015)

In NYC we don't have xchange and leasing a car weekly costs about 400+. 

Y'all should cry less.


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## Null (Oct 6, 2015)

Old Rocker said:


> I found out for certain today that only the lessee on the contract is allowed to use the Xchange vehicle.


Says who? The contract only precludes assignment of the contract. This is different than someone else driving it.


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## Null (Oct 6, 2015)

Old Rocker said:


> Do you have a copy of the contract? I do.


I have an xchange lease, so yes.


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## Null (Oct 6, 2015)

Old Rocker said:


> Then you know you are wrong...


Cite the page number or copy paste the text. Back up your claim.


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## Ca$h4 (Aug 12, 2015)

RAW DEAL
*Uber's car leasing program turns its drivers into modern-day sharecroppers*
*
http://qz.com/700473/ubers-car-leasing-program-turns-its-drivers-into-modern-day-sharecroppers/*


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## Euius (May 19, 2016)

BTW: A prius lease direct from Toyota is $216/month plus 15 cents per mile over 36,000 miles. The term is for two years.

Assuming 60k/yr (low, for a full time Uber) that's a a $12,600 penalty for the two year lifespan of the lease.

Total cost: $17,784

XChange cost for the two years: $16,640 (If we assume $160/week, which is the high end of the potential cost)

XChange covers all maintenance for those two years. Toyota lease only covers the first 25k miles worth.

XChange is financially the better choice for a full time uber operator, _regardless_ of credit. It's also easier to get out of the lease than Toyota if your needs change. So if it's "predatory", then so is Toyota.


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## Old Rocker (Aug 20, 2015)

Euius said:


> BTW: A prius lease direct from Toyota is $216/month plus 15 cents per mile over 36,000 miles. The term is for two years.
> 
> Assuming 60k/yr (low, for a full time Uber) that's a a $12,600 penalty for the two year lifespan of the lease.
> 
> ...


Don't forget, say $3000 down plus TTL works out to an extra $100 a month equivalent in your example. Worse if you end up financing the down payment and TTL.


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## Lost In Translation (Sep 18, 2015)

AllenChicago said:


> That's what I was thinking too. Normally, you have 12,000 annual miles built into your lease. You pay DEARLY for going over that 12,000.


I leased a 2015 Ford C-Max back when I had a good paying job in the real world. $1,500 down, $351 a month based on 10,000 annual miles. Last month was one year on the two year lease. I have 35,000 miles on the car. When the lease ends in another year I will have a two year old car with 70,000 miles on it.

The lease company will take it back, but they are expecting to get a car with only 20,000 miles on it. My residual pay-off is $17K.

It's $0.25 a mile for every mile over 20,000. That's a $12,500 over mileage charge. I can buy the car for $17K and maybe sell it for $10K, reducing my bill for depreciation to only $7,000. So the "hidden" cost of driving for Uber is the $351 payment + $291 in "hidden" depreciation. So my "real" car payment is $642 a month.

So the Uber Xchange lease is about the same. The only difference is I can postpone the ultimate day of reckoning.

Most Uber drivers do not understand the difference between PROFIT and CASH FLOW. I got great cash flow but my profit doesn't exist.


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## Snowtop (Nov 11, 2014)

Lost In Translation said:


> Most Uber drivers do not understand the difference between PROFIT and CASH FLOW. I got great cash flow but my profit doesn't exist.


Duh...Uber paid me more than I spent in gas. I am makin mony.


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## Sedgehammer (Jun 23, 2015)

Lost In Translation said:


> I leased a 2015 Ford C-Max back when I had a good paying job in the real world. $1,500 down, $351 a month based on 10,000 annual miles. Last month was one year on the two year lease. I have 35,000 miles on the car. When the lease ends in another year I will have a two year old car with 70,000 miles on it.
> 
> The lease company will take it back, but they are expecting to get a car with only 20,000 miles on it. My residual pay-off is $17K.
> 
> ...


You wanna know where your profit is? Driving an older car. Your example is for a 2015 model. Anyone with any common sense would know not to drive a new car for this gig.


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## Novus Caesar (Dec 15, 2015)

Sedgehammer said:


> You wanna know where your profit is? Driving an older car. Your example is for a 2015 model. Anyone with any common sense would know not to drive a new car for this gig.


You mean I should not drive a brand new car that loses half its value the moment I drive it off the lot and I then have to pay $400/mo!?


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## BurgerTiime (Jun 22, 2015)

Nice little article: http://www.triplepundit.com/2016/06...le-scheme-last-nail-sharing-economys-coffin/#


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## Sydney Uber (Apr 15, 2014)

Tim In Cleveland said:


> *In June 2015, Brandie Schmitt, 24, found herself broke in Los Angeles with what she called a "terrible" credit score. Five years earlier, a seizure put her in the hospital. Medical bills piled up, along with student debt for classes she never attended. She worked at Papa John's for a while, but then her hours got cut, and anyway, the two hour plus-bus ride to work was killing her.*
> After dropping $250 up front for her lease of a 2015 Honda Civic, she pays $160 a week to Xchange. If she keeps the car for the full three-year term, she'll ending up paying Uber $25,210. The Kelley Blue Book fair purchase price for a new 2015 Honda Civic SE in Los Angeles is $18,142. Schmitt said that she'll need to pay Uber another $5,000 or so to buy the car if she wants to keep it at the end of her lease.
> Schmitt was referred to Bloomberg News by Uber. She drives about 25 hours a week. In one week in May, she earned $604 for 28 hours of work, she said-a slightly better-than-average week. Uber took $160 for the car directly out of her paycheck, leaving her with $444. "It's been building my credit," she said. "It's expensive &#8230; but that's because my credit isn't that great."
> Uber's program is willing to take bigger risks on lease applicants than most traditional leasing programs, the company said. It has more reason to believe that someone will be able to pay them back, because they'll be making money driving for Uber, and the company gets their money before it pays the driver.
> Chapin said catering to drivers with bad credit is intentional. "Just as Uber is changing the nature of car ownership for riders, it's changing the nature of car ownership for drivers," he said.


Howdy Tim!

I wonder if the propeller-heads at Uber HQ could set up an algorithm that identifies Uber lease-holders at the instant a rider request is put through in an area, checks which one is struggling with payments and bypasses other cars to feed the hapless driver a life line just big enough to pay his car lease?


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## backstreets-trans (Aug 16, 2015)

BurgerTiime said:


> Nice little article: http://www.triplepundit.com/2016/06...le-scheme-last-nail-sharing-economys-coffin/#


Great article finally the general public is learning of the uber scam and how the sharing economy only benefits a select few who will get rich off the backs of the workers. Share croppers is an eerily close metaphor for the uber system.


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## PoorBasterd (Mar 6, 2015)

The only reason I would even consider going this route is...according to the article...that if I say: “F you Uber” or Uber say: “F you PoorBasterd”, I can just drop the car off and walk away from it without my credit rating taking a hit. Otherwise forget. You simply cannot make long term employment plans with a company as amoral as Uber. My own car has a year and a half left for driving in my market. After that, I'm done. There's no way I'm going to risk buying/leasing a newer car to work with a company as unpredictable as Uber.


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## SurgeMachine (Mar 15, 2016)

Everyones on here complaining about paying $150/week for a lease with Uber and clearly don't realize that taxi drivers lease gas guzzling 10 year old beat up crown victorias for $400/week from their taxi companies. Uber XChange is a way better deal than that. Personally though I am glad to own my own car. There's a blog post about cost to operate your car that gives you math on how to calculate your own. https://www.myridesharebusiness.com...How-To-Calculate-The-Cost-To-Operate-Your-Car


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## Yuri Lygotme (Jul 27, 2014)

Fireguy50 said:


> *Yeah! *
> I have 2 knees and a kidney if I miss payments, but what do I do if I miss a fourth payment?


Miss a fourth payment and this happens:


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## JeffRid3s (Jun 9, 2016)

What strategies do y'all use to keep up and stay on top of payments? I am a student driver and having some trouble lol.


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## Euius (May 19, 2016)

Lost In Translation said:


> Most Uber drivers do not understand the difference between PROFIT and CASH FLOW. I got great cash flow but my profit doesn't exist.


In five months I've made enough after expenses to pay 75% the original purchase price of my 2015 Prius. I'm at 12k miles.

So please explain to me how the depreciation is killing my profit?

The _actual_ difference in cost at 20k miles or 60k miles for a Prius is ...drumroll....two thousand dollars. That's 5 cents a mile. Slightly lower than my cost of gas.



> So the "hidden" cost of driving for Uber is the $351 payment + $291 in "hidden" depreciation. So my "real" car payment is $642 a month.


You admitted you own the car for reasons _other_ than Uber, it is thus incorrect and improper to assign the cost of the car as an expense of Uber. It is something you would owe anyways.

Your real problem is driving Uber _with a leased vehicle_ that has a mileage charge. I mean, that's really spectacularly dumb.


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## Djc (Jan 6, 2016)

Sydney Uber said:


> Howdy Tim!
> 
> I wonder if the propeller-heads at Uber HQ could set up an algorithm that identifies Uber lease-holders at the instant a rider request is put through in an area, checks which one is struggling with payments and bypasses other cars to feed the hapless driver a life line just big enough to pay his car lease?


This is easy. Give drivers a priority level, 1 = uber lease low week earnings, 2 = Uber lease mid earnings, 3 = non uber lease driver etc. Then give zone radius to pick up eg 5 mins then any priority 1s in that zone get request 1st then priority 2 etc. Computer can figure that out in a split second.

I've seen this happen in reality with Lyft and hourly guarantees getting primetime and long rides from pick up locations further than normal (there are closer drivers on app) during guarantee hours.


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## painfreepc (Jul 17, 2014)

Lost In Translation said:


> I leased a 2015 Ford C-Max back when I had a good paying job in the real world. $1,500 down, $351 a month based on 10,000 annual miles. Last month was one year on the two year lease. I have 35,000 miles on the car. When the lease ends in another year I will have a two year old car with 70,000 miles on it.
> 
> The lease company will take it back, but they are expecting to get a car with only 20,000 miles on it. My residual pay-off is $17K.
> 
> ...


 I don't care what anybody says I don't have a problem with my lease with santander I only put $1,000 down I'm done in 52 months, I'm paying 173 a week and when I'm done the car is mine,

Lease xchange does not do the repairs on your leased car you pay for that, they're only paying for the air filter and oil change, if you want to own that leased car after 36 months you will pay the residual,

Sounds like a way bigger rip-off than Santander..


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## grams777 (Jun 13, 2014)

SurgeMachine said:


> Everyones on here complaining about paying $150/week for a lease with Uber and clearly don't realize that taxi drivers lease gas guzzling 10 year old beat up crown victorias for $400/week from their taxi companies. Uber XChange is a way better deal than that.


The weekly taxi lease usually includes the car, maintenance, and the lick (commission) for the week. Insurance is possibly included also, but maybe not for $400 unless it's a 12 hour shift. And the drivers get about double the rates of UberX plus tips.

When you add up a full time uber driver's commissions and booking fees for the week plus your car costs and factor in the lower fares and tips, the taxi lease is likely much cheaper.


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## painfreepc (Jul 17, 2014)

grams777 said:


> The weekly taxi lease usually includes the car, maintenance, and the lick (commission) for the week. Insurance is possibly included also, but maybe not for $400 unless it's a 12 hour shift. And the drivers get about double the rates of UberX plus tips.
> 
> When you add up a full time uber driver's commissions and booking fees for the week plus your car costs and factor in the lower fares and tips, the taxi lease is likely much cheaper.


Just talk to a taxi driver last week down in Santa Monica, he said he drives about 90 to 100 hours a week, and makes around eight and nine hundred week,

Doesn't sound like more money to me if it is that's not very much,

If you think 90 to 100 hours a week is impossible you're very much mistaken..


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## saucy05 (Aug 23, 2015)

Another Uber Driver said:


> (emphasis added)
> 
> Those can be big "if"s.
> 
> That stated, if you go into it knowing what it is all about, knowing what to expect, knowing how to play it and it fits what you want to do with it it is, in fact, tolerable. Sadly, those in the foregoing category are in the minority.


If a person thinks they can make money by renting a car for $150 a week and driving it only on the weekend then you need to start questioning their intelligence. Also, if they don't like it they can always return it for some fee, they just need to work their butt off for one week to cough up the money.

This whole hatred towards the xchange program is over exaggerated. The program is excellent for people with great work ethic but in need of a car. It's people that have NO business leasing through this program that give it a bad name.


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