Uber promotes car loans through its Marketplace website and sends promotions to drivers via text. The deals include ordinary car loans and rent-to-own leases. Credit:Andrew Harrer But Uber says its Marketplace website is simply designed to "connect new and existing driver partners with vehicle rental, leasing and finance providers". "These solutions appeal to those that want to give ride-sharing a try via a rental program, to those that need a new vehicle to continue to earn money by sharing rides," a spokesperson said. No job, no problem An Uber driver who did not want to be named for fear of being deactivated from the company told Fairfax Media she had been approved for a car lease by two separate brokers despite having $50,000 in credit card debt and no other income outside Uber.

"Both Uber affiliated lending companies approved my application, meaning I can go get a brand new X-Trail this week if I wanted to," she said. "The problem is they are luring people in by exaggerating the potential earnings and not disclosing the hidden costs of driving for Uber like the fact you must pay GST on the full fare." She said Uber regularly sent her text messages promoting car loans and encouraging her to attend information sessions at Uber offices around the country. "It's unbelievable what goes down at these events... These companies hype up the earning potential of Uber driving just to get them to sign up ... It's a ticking time bomb." Benefits overstated?

One product spruiked on the site, a rent-to-own car lease for a Hyundai Accent, results in the buyer paying $33,000 over four years for the car – more than twice the retail price. Dan Manchester, who runs the Ride Share Drivers' Association Australia, said lenders were entrapping people in subprime loans by overstating the benefits of Uber. "​If you're the sort of person where you have to lease a car at $250 a week from one of these subprime lenders, then there are all sorts of ethical questions," he says. "[Lenders] are telling people you can earn a lot of money and you just can't. It is putting vulnerable people in vulnerable situations, especially as people can be deactivated for no reason and left with a lease to pay on a car." Drivers are required to sign a contract that gives Uber the ability to deactivate them at their "sole discretion" without notice. This has left some without a job and owing large sums of money on car loans.

Irresponsible behaviour Gerard Brody, chief executive of the Consumer Action Law Centre, said Uber was acting irresponsibly by encouraging drivers to take on debt while keeping them perpetually at risk of unemployment. "It's not responsible for Uber to be facilitating this sort of lending, if the driver is at such risk of being left with a loan that is unaffordable," he said. He said Uber's promotion of the deals could mean it is required to hold a credit licence under the law. "​If Uber is holding information sessions about credit options, and texting drivers about credit deals, then they are clearly encouraging credit," Mr Brody said.

Uber has come under fire in the United States for issuing subprime loans to drivers through a wholly owned Delaware-based subsidiary called Xchange Leasing. Partnerships with lenders The company also partners with several car leasing and finance brokers through separate confidential deals advertised on the Uber Marketplace, launched here in December. Rideshare Solutions is one of the brokers advertised on the site, alongside Autoflex Leasing, Easicar and peer-to-peer lender SocietyOne. Rideshare, based in Brisbane, describes itself as a traditional brokerage firm and says it writes loans to Uber drivers on behalf of more than 35 lenders, including the big four banks.



Michael Gleeson, the company's director, said a large amount of Uber-related loans received finance from Gogetta, a rent-to-own financier.

"They look at it like a normal loan. It's a normal application process and they are always concerned with responsible lending," he said. Risk-pricing used Peer-to-peer lender SocietyOne signed a deal with Uber in December to provide existing and potential Uber drivers loans to buy new cars. The company uses "risk-based pricing" for its loans, meaning interest rates are determined by a borrower's creditworthiness. "Any application for such a loan has to meet our strict credit and risk criteria and our obligations as a responsible lender," a spokesperson said.

Car companies have been quick to align themselves with the fast-growing ride-hailing industry, seeing a mutual benefit in getting more cars on the road. Last month, Toyota announced it was making a strategic investment in Uber and will also work together on offering auto leases to Uber drivers. Weak spot Uber acknowledges the potential of new drivers on its own growth strategy. The company estimates that every year, one in 10 Uber cars will become out of date. The company requires that cars must be less than 10 years old, and believes around 10-15 per cent of would-be drivers don't own a car that would fit those requirements. ​

​Professor Gail Pearson at the University of Sydney Business School said Uber's car financiers were taking advantage of a potential weak spot in Australia's lending rules. "If you've got someone who has $50,000 in credit card debt and who is being offered a loan, it seems to me that is fairly exploitative," she said. ​"There's been a lot of tightening up of investment housing lending, a lot of tightening up in payday lending, so I wonder what's going on in this market." 'You make nothing' Uber is also partnering with car rental companies. While they offer a less risky alternative to a loan, some drivers say they have been caught out by hidden fees.

Helen Komene, a former Uber driver in Brisbane, says she has been left owing $1000 to rental company Splend after Uber deactivated her in April. The fees relate to mileage charges. "My focus is trying to find a job. I can't get rid of that debt until then." She said Uber's vehicle partners overstated how much you could earn through Uber. "You're actually making nothing." Loading

Splend says it does not provide finance to drivers and provides vehicles to full-time Uber drivers on a rental basis only. Do you know more? Tell us here.