When Fair laid off 40% of its staff in October, CEO Scott Painter promised it wasn’t shuttering leasing services to on-demand fleets. But just one week later, he stepped away from the role of CEO and was replaced by Adam Hieber, a CFA from Fair investor SoftBank. Today, according to two sources, Fair announced at an all-hands meeting that it would end its Fair Go program that helped Uber drivers lease cars on short-term (by the week) deals, as the company pushes for profitability. The program will cease in April. Uber now confirms the news to TechCrunch, and now Fair has directly confirmed the news to us as well:
Due to an unexpected increase in insurance premiums that would have significantly raised prices for Fair’s rideshare drivers, we will wind down our weekly rideshare service over the coming months,” a spokesperson said. “We are working to minimize the disruption for Fair’s rideshare drivers, including notifying these customers of the status of their subscription in the coming weeks. We are working closely with Uber and exploring options with third parties to provide alternative customer mobility options to ensure a seamless transition for them, as well as continuity in Uber’s vehicle supply. We are thankful for our loyal Fair rideshare drivers and are disappointed we can no longer operate the business in a cost-effective way for our customers.
Uber drivers who want to lease a car for a month or longer can still do so through Fair. The current program that is being wound down allowed Uber drivers to lease for increments of a week at a time. From what we understand, the program comprised as much as half of Fair’s business with Uber at its peak.
Formerly valued at $1.2 billion after raising more than $2 billion in equity and debt financing from SoftBank and Lightspeed, Fair laid off 40% of its staff in October. It had bought Uber’s XChange leasing program in early 2018. The deal lets drivers lease an Uber-eligible car with subscriptions to roadside assistance and maintenance for as low as $130 per week with a $500 start fee.
But Uber sold the leasing program because it was unprofitable and adding to its losses at a tough time for the rideshare giant. As additional fees stacked up, Fair didn’t fare much better operating it.
A source tells us Fair Go was profitable. It was an important focus for the company as it retooled its subscription services for traditional drivers. Another source says at one point Fair Go was adding about 250 to 300 car leases per day and had thousands of active leases.
But Fair Go was facing higher insurance rates from carriers, which make sense, as Uber drivers can be on the road far, far longer than traditional car owners.
Rather than trying to pass those fees along to drivers — many of whom are already cash-strapped — Fair told employees it would cease to lease to Uber drivers. That’s a respectable choice, as it could have pushed Uber drivers into debt if they didn’t fully comprehend what their total costs would be.
Attempts to reach Fair for comment were complicated by many of its in-house PR team no longer being with the company. An agency representative provided the statement above after publishing time.