Uber has shut down Xchange Leasing, a money-losing subsidiary launched two years ago to directly lease vehicles to drivers on its ride-hailing network.
Uber, which has been contemplating a sale of the auto-leasing business, said Wednesday it was closing Xchange Leasing, the Wall Street Journal first reported. An Uber confirmed to Fortune it was shuttering the subsidiary that employs about 500 people.
“We have decided to stop operating Xchange Leasing and move towards a less capital-intensive approach,” an Uber spokesman said in an email sent to Fortune.
Xchange Leasing, which has about 40,000 vehicles and 14 showrooms in the United States, turned out to be a bigger money loser than expected.
Uber began winding down the business this summer after learning that losses were $9,000 per car on average, steeply above the previous estimates of around $500 per car, the WSJ reported in August. That’s 18 times steeper losses than expected.
Uber has tinkered around with ways to attract new drivers to its network for years. In 2013, the company partnered with automakers GM, Toyota, and several unnamed financial institutions launch a leasing program that would reduce drivers’ monthly payments and get them on the road faster.
Uber later decided to cut out the intermediaries and directly lease to drivers through Xchange Leasing, a program it started in 2015.