Uber will phase out its Xchange subprime car-leasing program, reports The Wall Street Journal. Launched in 2015, Xchange was an attempt by Uber to disrupt another area of the car business. But it accrued much heavier losses than executives expected. Xchange will reportedly be phased out because Uber misjudged the average losses for the vehicles it leased. The average loss per vehicle was originally expected to be $500, but ended up being $9,000 per car or SUV—around 18 times higher.
Regardless of what Uber does in the future, winding down Xchange will likely lead to major layoffs. Around 500 jobs could be affected, representing about 3 percent of Uber’s current workforce. Some employees may be shifted to other Uber divisions, but many are nonetheless at risk of losing their jobs.