Aug. 8 (UPI) -- Uber Technologies Inc. will close or sell its car-leasing subsidiary, sources close to the decision said Tuesday.
Leasing cars to Uber drivers through its subprime Xchange Leasing program costs the company an average of about $9,000 per vehicle, executives discovered, instead of the anticipated $500 cost, the Wall Street Journal reported Tuesday.
About three percent, or about 500, of Uber's 15,000-employee staff could be affected by the decision to close or sell the division, which the company started two years ago. Drivers, who Uber treats as contractors, have been critical of high lease payments. It is unclear how existing leases will be affected by the decision to end the lease program.
Uber has expanded into 70 countries, but sustained losses of about $3 billion in 2016. Investors have leaned on the company to control costs in preparation for a possible initial public offering of stock, and Uber CEO Travis Kalanick was ousted in June.