Uber Is Now Actively Preying On the Poor

[FrodosPet]

Would you pay over $600 per month to lease a Corolla if you had a choice?

http://www.fool.com/investing/2016/06/05/uber-is-now-actively-preying-on-the-poor.aspx

Evan Niu - Jun 5, 2016 at 11:00AM

Earlier this week, Bloomberg reported on Uber's controversial leasing program, Xchange. Launched almost exactly a year ago, Xchange is a leasing program that's offered to Uber drivers with poor credit. Now that people have had some experience with Xchange, we're starting to see a very real and very dark underbelly.

Xchange is very much an attempt to grow Uber's army of drivers, which the company desperately needs considering its high turnover rates. Uber even scored a $1 billion credit facility from the big investment banks to help fund the program.

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However, the target market is drivers that decidedly do not qualify for traditional leases. The program has been compared to predatory payday loans, which similarly prey on the poor and those with bad credit profiles. The lease payments are drawn directly from the Uber driver's paycheck, too.

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Bloomberg also spoke with a driver that would have to pay a total of $37,200 over the course of the lease, including exercising the purchase option, for a GM Chevy Cruze that's only valued at around $16,400. That driver pays $800 per month for his Cruze. That kind of money will buy you a BMW or a Mercedes, but of course the point is that the target driver is unable to qualify.

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[hr]
Show of hands: How many people hate payday lenders but love them some Uber?

[Kelvin Mace]

1. Don't use Uber

or any other like service and never would. On my visits to the big city I use public transit and regular taxis when needed.

[FrodosPet]

2. Bad people and good people

Bad Person - She supports payday lenders


Good person - He uses the auto leasing equivalent of "payday loans" to keep drivers tied to Uber.

[KamaAina]

3. There is a school of thought that Uber is about to collapse and take all of $iliValley down with it.

http://finance.yahoo.com/news/apple-buy-uber-221244634.html

Not all signs are good. The company is burning through money at an alarming rate and relying on apparently insatiable funders to keep it going. It's not having an easy go of it in Europe, its US rivals are hooking up with big carmakers — GM invested $500 million in Lyft — and it's anybody's guess how it will fare in China.

Uber is the most impressive Silicon Valley startup since Facebook, but unlike Facebook, Uber operates in the rough-and-tumble real world of human drivers, passengers, unions, unfriendly governments, and machines that can kill people....

Uber doesn't seem desperate, but we do know that it's nowhere near making money. The goal is to get huge, to become utterly dominant around the world. But Uber is already dominant in the US, and that hasn't been enough.

If Uber runs out of investors, it will either have to withdraw from certain areas of business, like China, or take a big cut in its valuation. That could spark a flight from tech investments like we haven't seen since the recession of 2008.

[dembotoz]

4. if it sounds too good to be true....but this does not even sound good

somebody has to be sold a real stack of poop to think a 600 nut is a money maker