Saturday, February 28, 2015

Here's How Boris Bike Sponsors- Santander and Uber Have Partnered to Get More Drivers on the Road

Massachusetts Attorney General Martha Coakley is investigating Santander, the Spanish bank with US headquarters in Boston, for suspicious auto lending practices, which appear similar to, but on a less catastrophic scale, the subprime mortgage scam that led up to the collapse of the U.S. housing market in 2008. Santander Consumer USA (SCUSA), the bank's branch specializing in car loans, has been in partnership with Uber and offering low payments to potential car buyers who would like to drive on the Uber platform.

Coakley has subpoenaed the records of Santander Consumer USA for its borrowers credit scores, the interests rates they were charged, and how the loans were pitched to investors, Brad Puffer, a spokesperson for the AG told the Boston Globe, which added in its report that "Coakley took a similar approach in investigations of subprime mortgage lending a few years ago."

Santander isn't the only bank being questioned, Puffer told the Globe. Coakley has questioned a number of other auto lenders across the state. The investigation in Massachusetts coincides with similar investigations by other state attorneys general across the country.

As is usually the case with Uber, any involvement the widely popular and controversial ridesharing company may have in Santander lending loans to unlikely-to-pay borrowers would appear to be indirect. However, neither Santander nor Uber has been shy about offering low rates to prospective drivers looking to get on the road.

On its website, Uber states that one can apply for customized car financing options in order to drive for Uber. Deals would be arranged through Uber and its partner, Santander Consumer USA.

Here are the details Uber shares about the program:

  • It's available only for Uber partner drivers, who must pass a "City Knowledge Exam" at the Uber office.
  • Drivers are asked to fill out a consent form, authorizing Uber to share data with SCUSA – and only SCUSA.
  • Drivers are allowed to choose an eligible uberX, UberBLACK or UberSUV vehicle and set up an appointment with a "corresponding SCUSA Uber Select Dealer."
  • After selecting a whip and setting up an appointment, drivers must bring their down payment to the SCUSA dealer, who will "walk you through the application process." Insurance is also required.
  • Once a driver has signed a contract, he or she will be asked to provide proof of insurance to the dealer. If all checks out, then it's time to drive.

Uber's pitch: This lease-to-own financing is "Affordable, easy to qualify and simple." Partner drivers, Uber claims, can receive payment offers as low a $17 per day. Drivers can drive the miles they need in order to "earn what you want." And, at the end of the lease term, drivers who have provided a deposit can "own the car for $1."

Here's a sample of eligible Uber vehicles.


Uber has been trying aggressively to add drivers on its network, using low-rate auto financing as its hook, for more than a year. In November, 2013 blog post, Uber CEO Travis Kalanick, in light of widespread expansion into new markets, announced, "in true Uber fashion, we're finding innovative ways to power billions of dollars in car purchases."

The goal of the pilot program – which was launched in Boston, San Francisco, Dallas, Chicago, New York and Philadelphia – was for Uber, in partnership with carmakers General Motors and Toyota, as well as "leading financial institutions," to lower operating costs for drivers and get more cars on the road.

Wrote Kalanick:

The key to this new platform? Uber partner-drivers have a robust, reliable cash flow through the Uber platform – every fully utilized car on the Uber system grosses over $100,000/year. That kind of cash flow lowers the risk of financing drivers and means better access to cheaper credit than otherwise available on the open market.

The business model seems simple and, at least in theory, rather brilliant: add jobs by giving people a way to finance their own business – their cars they plan to drive for Uber – for cheap. Lenders' risk would be minimized because they wouldn't just be lending borrowers money for a car; they would be kickstarting a proven money-making business.

But, since November, 2013, Uber rate cut after rate cut has been eating away at drivers' fares. In order to make the $50,000 or more a year Uber has said can be made, drivers have been forced to drive longer hours and more miles.

In response to Uberpeople.net forum member uberCHICAGO'squestion, "Any drivers Lease from Uber's Santander deal," another member wrote:

"Yes! Im trying to turn in my car right now now. Im stupid and I didn't read the contract. The interest was in there even though Uber said there woulnt be any interest. I know for next time...that there is no such thing as "no interest" when leasing. (again...Im stupid)

Uber said my chrysler 300 would be UberBlack one day in LA. Then after we get the car, we find out my car will NEVER be UberBlack in LA.

They lied about the gas milage too. 20mpg. NOT 31MPG!!!

They lied about "no penalties" for canceling the lease. Lies and more lies. Now I gotta pay $2,100+ just to give the car back.....but first santander has to get off their asses and "OK" it to the car dealer before I can turn in, otherwise its a liability for the dealer.

I feel like a shmuck.

Oh yeah! ...and also I quit working because of these shitty new rates.....so yeah. Im done with driving...at least with this crappy lease and way too expensive car.

I wish someone else would come forward and admit they got suckered too so I don't feel as bad."

In response to that, another member commented:

I feel sorry that you gotten taken advantage so badly. The promoters of the Santander deal should be criminally prosecuted for fraud. Yes, lying in that way constitutes fraud. And LYING is a core corporate value of Uber, it is the fundamental premise on which the business has been built.

Other commenters provided mixed reviews about Uber-Santander car financing. "I am on the Santander program and have not noticed much of a difference in being able to make it out here," one commenter wrote.

"I almost took the Santander deal," wrote another, adding: "Very glad i did not, to really make a dollar you have to hustle, not to mention be all over town. Trust me I will find a way for Uber to work for me, on my terms... I see the company is not looking our for their 'partners.'"

Santander Consumer USA, Uber's partner, has received the most complaints for auto lenders in the US Consumer Financial Protection Bureau’s database, according to the Globe report. Through September of this year, the company has repossessed 166,000 cars, which is about 12 percent of the total amount – 1.4 million – cars repossessed by US lenders in all of 2013.

Editorial Comment :
This story was buried over the Christmas Holidays and would have slipped by unnoticed, if it hadn't been spotted by our ace researcher J. 

            Source : Bostinno.Streetwise.co

9 comments:

Peepy Tom said...

Blimey you are right just google them and there it is. Interesting it happened over the Christmas holidays so perhaps got buried in the news. One thing for sure "Taxi leaks" is like the neighbours they miss nothing ! Like a pair of twitching net curtains

Anonymous said...

Well they couldnt dare put uber on the bikes but hey noone will notice if we slip em in this way!!! Disgraceful! I feel gutted, punters hailing ph in the streets, long jobs few and far between, we are shunted to one side left to die, it may be kipper but I have noticed changes in the last 6 months to this trade, going down hill faster now!!

Mick

Anonymous said...

First thing to find out if this financing is applicable here.

Next back onto the GLA for more enquiries.

The palin truth is that as this blog and others have said over and over, TfL should not be licensing us AT ALL.

Anonymous said...

Well done Jimmy and "J"

Anonymous said...

Uber finance is already here, just look around at all the new e class mercedes. They will start to get snatched back in another 6 months or so when the poor suckers get fed up with working 100 hours a week to pay for them. Not that much work for e class in london, punters rather have a real taxi, with a real taxi driver, that can whizz down a bus lane. Uber is a very nasty firm which will destroy Londons taxi and phv industry, turn every driver into a slave paying them £250 a week and ripping of every punter who uses taxi and/ or phv in london. TFL WAKE UP !!! You are about to destroy the world famous , best in the world Taxi service.

I'm Spartacus said...

Are we at what they call the cliff edge moment?

Slow decline now rapidly accelerating.

We effectively proved we would not show any large scale resistance when some offered the age limit and allowed ourselves to be shafted over the Olympics.

TfL torn between commercial interests and being a regulator, it cannot continue, Hendy, Daniels and co are political animals and react to pressure.

Can we create any?

Anonymous said...

What I wanna know is when every man and his dog is a uber driver who the hell is gonna be your customer lol

Anonymous said...

Six hours in the feeder at Heathrow, soon it will be seven, then eight.

A politically motivated licensing authority, driven by a deep hatred of Taxi drivers.

A thoroughly corrupt Mayor who imposes policies that his cronies can profiteer from. He cares nothing about this City, or the London Taxi trade.

The most corrupt government in living history.

And the trade orgs are saying they need more money to fight for the trades future. Of course there's no mention of the money they stashed away over the last five years of collaboration with TfL.

How much money does it take to try and resuscitate a corpse ?

The only hope the trade has is if Hendy should catch something incurable off the internet.

Anonymous said...

We need a mass demo, never mind the unions, we don't need them.
We need a leader, a figure head, a celeb who will back us and get the TV and radio media people to listen.

We need to know what we want. A clear list of objectives to why we are protesting.
Phv parked on every rank is a good start

Plenty of celebs dads were taxi drivers, they know how hard we work and how much we scaxrificed for the knowledge.

Fix bayonets gents , we have to win !!