Uber signs $14m car rental deal with South Africa's WesBank
Uber has agreed a $14m deal with South African vehicle finance provider, WesBank, to rent cars to drivers who can't afford to buy them, the companies announced on Tuesday. WesBank, an arm of lender FirstRand, will rent cars to Uber drivers who do not qualify for traditional car loans due to a lack of credit history. Around half of car loan applications are declined in South Africa, WesBank chief executive Chris de Kock told a news conference. WesBank will recoup the loan from the fares Uber drivers collect from passengers, lowering default risk, de Kock said. The amount repaid by drivers will depend on the level of business they generate.

Uber and WesBank offer long-term car rentals to existing Uber drivers with low credit rating.

Uber SA now offers existing driver-partners access to a specially designed full maintenance lease programme, giving them access to a vehicle at preferential rates.

This programme is valued at more than R200 million.

It was developed by WesBank in collaboration with FirstRand's Enterprise Development Fund, Vumela, which has pledged R20 million for the first 1 000 vehicles. Vumela will provide WesBank with financial risk mitigation and support measures, which will enable the provision of the full maintenance lease option to Uber driver-partners.

According to Alon Lits, GM of Uber SA: "Anyone who has been driving using the Uber app for a reasonable time and has a good earnings and quality record, now has the opportunity to acquire a brand new car and start their own business full time."

To qualify for the lease, Uber drivers have to have been registered on the service for at least three months, have completed at least 1 000 trips and have an Uber rating of 4.7 or more.

South Africa is one of the first countries outside of the US to offer such a service to its drivers.

Chris de Kock, CEO of WesBank, says: "We have recognised Uber's ability to disrupt and transform the transport industry, while creating work opportunities for thousands of people across the world."

De Kock says the problem in SA is that the majority of the population has a low credit rating. "60% of all vehicle finance applications are denied."

This solution relies on the drivers' proven Uber track record and not their credit rating.

Uber is an international transport company that does not employ any drivers or own any cars, but provides the technology platform that enables the connection between driver and passenger.

It has over 2 000 drivers operating across the country, with plans to expand to 15 000 by 2017.

"Last year, a million trips were completed in South Africa and we doubled by July this year," says Lits.

Uber in Cape Town and Johannesburg saw larger growth rates than Paris and San Francisco in its first year of operation.

New drivers

This funding opportunity is not limited to drivers with an existing record of income with Uber.

Hertz, Europcar, Pace and Fleet Data Technologies have launched a short-term rental programme, negotiated by Uber, that gives drivers of metered taxis or other passenger transport vehicles the option of renting an accepted vehicle (that meets Uber standards) at improved rates. They can then use these vehicles, in partnership with Uber, until they have built an earnings and quality record needed to qualify for the full maintenance lease programme.

"People using Uber to get around have come to expect a reliable, affordable ride in a high quality car. We've seen many great drivers, who want to use Uber to boost their earnings but struggle to afford a vehicle that meets these standards," says Lits.

These two vehicle solution programmes form part of Uber's commitment to opening the technology platform to new operators and empowering existing drivers.

Local battles

Earlier this year, Uber SA came under fire from government about licences.

Government was slow to regulate the new industry created by Uber, leading to ambiguity around how the e-hailing service should be licensed. The three metros where Uber operates interpreted the national recommended licensing protocol differently. At the same time, Uber drivers were being intimidated by other metered cab drivers who claimed Uber was stealing their business and operating illegally.

Lits says the violence has mostly cleared up, with an isolated incident in Centurion last week. Engagement with cities and provincial committees has gotten much better, says the GM. "They now see the need for the service and are working with us."

He hinted Uber may launch in another city before the end of the year, and that the service had pop-up festive surprises planned.