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Uber South Africa has teamed up with car-financing giant Wesbank in a deal designed to give Uber drivers easier access to cars.
The deal, estimated to be worth R200-million, also includes FirstRand’s enterprise development fund Vumela, and will allow drivers to lease vehicles from Wesbank over a period of three years.
In a joint statement, the two companies said that the amount each driver paid for their lease would be based on their established earnings and quality ratings. In order to qualify for the deal, drivers also have to have been active on Uber for more than three months.
According to Uber, the deal is the first step in allowing partner-drivers to build up their own transport businesses. By leasing the cars, Uber says, the driver-parnters are given a chance to build up a good credit record. This in turn makes it easier for them to buy their own cars later down the line.
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As part of the deal, driver-partners will also be able to buy the cars at the end of the lease period.
“The (Uber) technology is really about empowering these entrepreneurs. But there was always a piece missing. It wasn’t always easy for Uber drivers to get finance,” said Alon Lits, the regional general manager for Uber in Sub-Saharan Africa, at a media briefing in Johannesburg.
According to Wesbank CEO Chris de Kock, the deal also circumvents the credit record issues that South Africans typically face — some 60% of formal requests for financing in the country are reportedly turned down.
With Wesbank owning the car and Vumela guaranteeing the lease, driver-partners aren’t subject to the same kinds of pressure that they would be with a traditional car loan.
“We own the car at all times. It’s not a traditional finance agreement at all,” said de Kock.
“We have worked very closely with Uber and we have developed a unique understanding of being a driver-partner within their network,” he added.
“We have worked out what are the right affordability criteria. We have agreed with them (Uber) that they will subtract that income… and pay us that revenue before it goes to the driver,” said de Kock.
According to Uber, the deal is “not limited to drivers with an existing record of income with Uber but open to all prospective professional transport providers as well”.
“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 at improved rates,” said Uber in a statement.
“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,” said the company.