Japanese conglomerate SoftBank Group is among a group of creditors that have handed $500m in loans to car leasing app Fair, as the startup seeks to rapidly scale its partnership with ride-hailing giant Uber.
Fair wants to make it easier for those wishing to drive for the ride-hailing app to loan or lease a vehicle. Today Fair has announced a revolving credit facility, led by Japan’s Mizuho Bank and SoftBank, which will allow the company to continue to grow.
“Too often, people who want to drive for Uber can’t get reasonable rates on a car loan of even get access to one at all,” Scott Painter, CEO of Fair, said. “This transaction is another clear signal that, through our partnerships with SBG [SoftBank Group] and Uber, Fair has the momentum, consumer demand for vehicles, and access to capital to be the supply-side solution for ridesharing globally.”
According to Fair, leasing a vehicle usually requires drivers to agree to a 36-month contract, while loans typically last between five and seven years.
“Lack of vehicle access is one of the biggest barriers drivers face when trying to earn on Uber,” Daniel Danker, head of driver product for Uber, said.
The Fair app allows drivers to rent cars for a short period with the freedom to return it at any time. The model sees drivers pay a one-time payment at the start of the contract, followed by a monthly fee.
Through the Fair Uber partnership, drivers are able to rent Fair vehicles by the week directly through the Uber app. Insurance, maintenance and roadside assistance come included. Uber drivers aren’t required to pay the up-front payment.
SoftBank Fair: Japanese conglomerate increases investment in ride-hailing market
This is the second investment that SoftBank has made in the firm, having previously led a $385m funding round in December 2018.
SoftBank has also invested in the General Motors’ autonomous vehicle company Cruise, as well as Uber rivals Didi Chuxing, Grab and Ola, as it seeks to establish itself in the emerging autonomous vehicles market. These investments were made through SoftBank’s Vision Fund, a $100bn pot for investment in growth stage technology startups.
According to SoftBank, by providing Fair to more capital, it is helping to unlock growth potential for both Fair and Uber.
“This new line of debt capital unlocks unlimited growth potential for both companies, as they continue to transform the fundamental relationship between people and cars,” Hiroki Kimoto, head of SoftBank Group’s real asset investment department, said.