Uber signs US$14mil car rental deal with South Africa's WesBank


  • TECH
  • Wednesday, 11 Nov 2015

New scheme for drivers: WesBank will rent cars to Uber drivers who do not qualify for traditional car loans due to a lack of credit history.

JOHANNESBURG: Online taxi-hailing service Uber has agreed a 200mil rand (RM61.41mil or US$14mil) deal with South African vehicle finance provider WesBank to rent cars to drivers who can't afford to buy them, the companies said. 

WesBank, which is 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 drivers repay will depend on the level of business they are doing. 

Uber Technologies Inc, currently valued at over US$50bil (RM218.37bil), uses a free GPS-enabled app to link drivers from private car companies to passengers at cheaper rates and promises a quicker response time – often within 10 minutes. 

San Francisco-based Uber was launched in South Africa in August 2013 and operates in over 60 countries. Uber clocked 2 million rides in South Africa in the first six months of 2015, Uber said. 

FirstRand's enterprise development group Vumela will educate drivers on running their own business and also provide cash to WesBank if car loans are not paid. It will also finance 20mil rand (RM6.13mil) for the first 1,000 cars, Uber said. — Reuters

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