Uber, Wesbank in R200m car rental deal

(via BDLive) Uber is a cashless, app-based taxi service operating in 344 cities across 63 countries. In SA, where it is active in Johannesburg, Cape Town and Durban, Uber wants to draw its drivers — or driver/partners, as it likes to call them — from poor backgrounds.

It also wants them to run their own cars but because almost all have limited existing income and no credit records, they are unable to get loan finance.

Their task is made harder by the fact that they must buy new cars, selected from a group of models approved by Uber. “Uber is very prescriptive in this regard,” WesBank CEO Chris de Kock said on Tuesday. “The requirements are quite stiff.”

The solution, he said, was for the bank to supply vehicles on a full maintenance lease (FML). WesBank would retain ownership and lease cars to drivers. Rates would be levied per kilometre, to cover the cost of insurance, maintenance and depreciation.

Alon Lits, Uber’s sub-Saharan Africa GM, said: “Because the programme developed with WesBank offers rates significantly more competitive than these drivers would otherwise have been able to obtain, their business ventures have a far better chance of succeeding in the long term.”

WesBank’s financial risk is mitigated by Vumela, an enterprise development fund specialising in small-to-medium enterprises with high growth potential. Vumela has put up R20m for the first 1,000 vehicles, covering WesBank against possible losses. Mr de Kock said: “It’s an underpinning guarantee, in the event that a car is lost or a driver doesn’t generate enough revenue to meet his obligations.”

He added that Vumela also had a role in business education for drivers. “It will help them understand what it means to be self-employed; how to cope with peaks and troughs in income and how to plan for the future.”


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