Two years ago, Uber had decided to expand their influence in the transportation market by starting a leasing program for drivers employed by their services. The original plan was to lease a vehicle to their drivers at a loss, but the loss will be recovered by an influx of drivers that would not have been able to work for the company if they did not have a vehicle. However, the expected loss of $500 per-car it leased has ballooned to roughly $9000 a car. The losses come from increased depreciation of vehicles. The same problem that has been plaguing car rental services that have seen Hertz and Avis, the two largest car rental companies in North America, to restructure their fleet and philosophies to battle depreciation of the fleets. Major auto manufacturers are also feeling the burn and many have committed to downsizing their idle fleets by 30 to 50 per cent.
Uber has apparently sunk $600 million into its domestic leasing program, opening in 24 markets. Critics of the program says the business plan was doomed from the start. Sources claim the lease costs were more than a driver would pay a typical dealer, which in return would force the driver to take more fares. More fares meant more wear and tear on the vehicle, which would have resulted in a lower resale value. And while it has been reported Uber will be ending their leasing program, GM is rushing in to fill the void with their already established Maven program. The auto manufacturer announced they will be expanding Maven from its current San Diego and San Francisco locations to other US cities. Starting already is Los Angeles and by fall this year, Boston, Phoenix, Washington, DC., Baltimore and Detroit will follow.
The program will allow drivers to rent vehicles such as the Chevy Bolt EV and Cruze. Prices start at $189 a week for the Cruze and around $229 for the Bolt EV. The prices may be high but it comes with unlimited miles, commercial-use insurance and maintenance. Gas will not be covered. And drivers can walk away anytime if they decide they no longer need it. Chevy says the Bolt EV is the most popular ride for Maven renters. "Drivers want the Bolt EV because of cost savings as well as helping with energy and environmental goals," said Rachel Bhattacharya. And since the Bolt EV does run on electricity and it is a lot cheaper than gas, the Bolt EV may be the cheapest way of doing ride-sharing. The only issue may be the 238 mile travel range, which could limit the hours a driver could work. A typical New York City taxi driver drives about 250-300 miles a day.