On the back end, that flexiblity to let you end at any time costs more than the 10 to 15 percent premium you pay. Equity dollars are used to recondition and transport your car and also to pay the debt on it until a new customer can get in it. Since the majority of their customer base churns through the platform with low tenure and is not retained (short term Uber drivers), it is a major problem and has destroyed every other player who tried to do short term leasing. You need a longer tenure to cover the cost of turning the car around.
> Equity dollars are used to recondition and transport your car
Not true! I get charged at the end of my lease for any "wear & tear above normal". Fair allows the customer to pre-pay a monthly surcharge to avoid the lump sum W&T charge at the end. Transport is cheap: I can get the car towed across town for <$100, which is less than 40% of a single monthly payment.
> Since the majority of their customer base churns through the platform with low tenure and is not retained (short term Uber drivers)
How can you possibly know that? Here in NYC driving for Uber is not a short-term thing by any means. TLC licensing cost and the time it takes to obtain this license is sufficient overhead to lock Uber drivers in for a long time in the hope of perhaps one day breaking even. Fair also charges a relatively hefty (I paid ~$2k) lease start fee in order to discourage customers from churning too quickly.
> Your gut is very wrong on this one, sorry.
I encourage you to present information in support of your assertion.
That lease start fee has gone up about 3x, to about 6k, so obviously it was not enough. And at that rate people are better off getting a new car via a typical lease agreement.
Fair is probably done al la WeWork. Out of money, living a 25 million dollar loan from Softbank, and abandoning everything but their Uber rental product. The Uber product is the Xchange Leasing one they took over from Uber because Uber was constantly losing money on it. In exchange for taking over that Softbank had given Fair a pile of money that lasted just over a year. Now that is gone and Softbank is just trying to figure out how to keep a pale shadow of Fair alive because Uber needs those cars on the road.
This 40% came very hastily and was focused on product and eng. 4 weeks severance and no clarity on if you have benefit coverage during this. This was cutting for the sake of cutting, no clear consolidation
of teams. Folks on the lots are expected to go in the next wave. Word is there is another 25 million out there Softbank will give Fair once Fair cuts enough overhead.
Also some suppliers haven't been paid for months, some going back to July. At one point an irate supplier blocked the entries to the Irvine lot with his tow trucks until Fair paid at least some of the 700k they owed.
Your gut is very wrong on this one, sorry.