Uber is planning to close out or sell its car-leasing businesses in the U.S. by the end of this year, a source told CNBC.
A person familiar with the matter told CNBC that Uber will shut down, sell to a partner or consolidate the business to make it more efficient. The company is taking a harder look at expenses that hurt the bottom line, including leases, but will make sure there's a vehicle option for drivers who use the Uber's Xchange leasing division.
A report today in the The Wall Street Journal also said that Uber executives realized that the average loss per vehicle was about 18 times what they had thought, an unsustainable level for a start-up that is losing money despite high revenues. The leasing division saw losses of about $9,000 per car, more than the estimated losses of around $500 per vehicle, the Journal said.
About 500 jobs out of Uber's workforce of 15,000 could be affected, the Journal said.
Uber drivers have complained about the high lease payments required by the companies they lease from. Drivers, who as contractors don't typically have employer-based health benefits, have told outlets such as Quartz and The Washington Post that they were unable to keep up with payments amid serious illnesses. It's unclear if those type of leasing alliances will be affected by the change to Uber's Xchange division.
Meanwhile, Uber has been on a quest to improve relationships with drivers, announcing a 180-day plan this summer to make driving "more flexible and less stressful." After CEO Travis Kalanick stepped down earlier this year, the company has gone through a series of changes under the stewardship of top executives and board members such as Arianna Huffington.
— Reporting by Deirdre Bosa