To many observers, the endgame of Uber’s auto market disruption is a world where you never own a car again.
But there’s an irony in how Uber, (2016 CNBC Disruptor No.1), plans to get there: It’s making a big push into the hundred-plus billion-dollar auto financing market.
Automobile financing amounts to $116 billion a year just in the United States, according to IBISWorld, all for the sake of car ownership — or something resembling it.
Financing cars by the thousands is hugely expensive. Xchange secured a $1 billion credit facility led by Goldman Sachs, according to a person familiar with the matter. The facility was put in place last week and includes capital from Citigroup, Deutsche Bank AG (New York Branch), JPMorgan, Morgan Stanley and SunTrust, the person said.
The credit facility was previously reported by Bloomberg News.
By the end of 2016, Uber expects that 100,000 cars will have been provided globally through the vehicle solutions programs, with $2 billion going toward car sales.