Uber Leases: The Company Towns of the 21st Century

car and moneyRemember the stories of the little towns owned by coal companies?  The coal company would provide housing and had a general store where the miners would use company script to purchase their needed goods.  After paying for their rent and food needs, the miners often had nothing left while the coal companies made money from both the coal that was mined and from the miners themselves.

Fast forward to the “Gig Economy.” The Gig Economy, as it is known, has proven to be a decent way for people who are otherwise out of work to make some money.  Think Uber, Lyft, and Airbnb.  Some companies offering their platform offer money that rivals that of a full time job.  The work they offer seldom comes with benefits.  This post is a warning for people looking to lease through Uber.

As a bankruptcy attorney, I often see people who are down on their luck and who frankly have pretty bad credit.  These people are often offered the very worst rate on auto financing, home financing and credit cards.  How does a 29% interest car loan sound? Unfortunately, Uber is getting in on the subprime lease game through a company they own called Xchange Leasing.  Knowing, presumably that their drivers are often people who have lost a job and thus don’t have credit, they offer people a way to get into an “Uber qualified” car.  Bloomberg recently ran a report with an Xchange customer who is paying $160/week for a 2015 Honda Civic SE  That works out to $693.33 per month.  52 weeks in a year / 12 months.  Contrast that with Honda, who, as of this post, is offering a $139.oo per month lease with zero down.  That is a 499% premium that Uber Xchange customers pay over a qualified lessor.

I have had two clients in the past month come to me with these leases.  They have among the worst financing terms I have seen.  It would be a far better move to attempt to build your credit a bit and then buy or lease at a much better rate.   Granted, Uber has pretty liberal policies when it comes to getting out of the leases, but you would think that since they take the payment directly from the earnings of their drivers that they would offer something better than sub-prime lease rates.  As it stands, Uber is making money from the trips that are driven and now from the drivers themselves.  Sound familiar?

Best of Luck,

Steven Palmer
Licensed in WA and OH
http://www.northwestbankruptcyattorneys.com
http://www.curtislaw-pllc.com

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Northwestbankruptcyattorneys Blog Year End Review

Fireworks

The year 2015 is almost ready for the history books.  Before we look ahead into what 2016 brings it makes sense to look back to get a greater sense of where we need to be headed.

This year I posted on a variety of bankruptcy issues, mostly general in nature to give my clients and anyone contemplating bankruptcy some issues to think about.

This year started out with looking at how loan modifications can still be pursued by debtors in chapter 13 bankruptcies. (They can be obtained and can be a great way to deal with a home that you had almost lost.)  I then looked at what happens to your car when you file a bankruptcy. (You have lots of options.)  Since so many of my clients are worried about how their credit scores will be impacted by the filing of a bankruptcy, we did a post on bankruptcy and your credit score. (The impact is not nearly as bad as people think.)  I then put together a post looking at some of the do’s and dont’s of filing a bankruptcy.  If you are contemplating a bankruptcy, please read or reread this post.  The award for the biggest northwestbankruptcyattorneys blog post goes to The History of Student Loans in Bankruptcy.  I did a ton of research for this post and am pretty happy with how it came out.  If you are at all interested in the topic, please give it a read.  The changes that have taken place over the course of 60 years are astonishing and terrible.  They remind me of the proverb, the road to hell is paved with good intentions.  From there, I tried to give potential filers some ideas of how they can find a good bankruptcy attorney in 5 Tips for Finding a Good Bankruptcy Attorney.  We then looked back at the topic of homes and bankruptcy in the Halloween Special Zombie Homes Attack.  (You do have options if you have a house that is stuck in your name after bankruptcy.)   The award for biggest rant post of the year goes to Credit Unions: The Devil is in the Details.  In that post we looked at the hidden dangers of using a credit union for a car loan and also having credit cards or bank accounts with those same credit unions.  Lastly, the Christmas Special this year was The Christmas before Bankruptcy.  In that post we looked at some of the hidden dangers of gift giving and receiving before filing a case.

In the coming year, look out for more posts on student loans and ways to deal with your small part of this national crisis.  Another post on zombie homes and getting rid of them through the bankruptcy process.  A more detailed look at what you can do to rebuild your credit.  A post on attempting to avoid bankruptcy.  There will be others as well as the inspiration strikes.  We are also open to writing on topics that people request, so if you have a topic you would like to see an article written on, please suggest it below.

Happy New Year from all of us at northwestbankruptcyattorneys.com and the Curtis and Casteel Law Group.

Steven M. Palmer, Esq.
Licensed in WA and OH
http://www.curtislaw-pllc.com
http://www.northwestbankruptcyattorneys.com