A multimillion-rand programme designed to help Uber drivers buy their own cars has been deemed exploitative and disempowering.
Launched in 2015 by vehicle finance provider WesBank, together with FirstRand Enterprise development fund Vumela in collaboration with Uber, the programme is a “maintenance lease programme [to help] … Uber driver-partners who would conventionally not be considered creditworthy … to obtain a vehicle … and generate income for themselves,” WesBank said.
Uber’s footprint has increased exponentially around the world, with a presence in more than 600 cities. The software application connects drivers with commuters and charges drivers a commission for every ride, which in South Africa is between 20% and 25%.
Uber does not own any cars and takes no responsibility for them. The driver-partner is responsible for the insurance, petrol and general service of the vehicle. Some car dealerships have partnered with Uber to provide vehicle solutions, for example Pace Fleet Services.
WesBank saw an opportunity to provide a maintenance lease programme for Uber drivers who were renting their cars from other people or garages. The programme was not based on credit ratings. Instead, the driver had to prove they were registered with Uber and show their quality ratings.
“There was a certain criterion we needed to pass. You needed to be [an Uber] driver with 500 trips and a [quality of service] rating of no less than four out of five,” said Samuel Mudaru*. “We were told by Uber that rather than renting a car from other people, there is a rent-to-own contract that is offered by WesBank. Looking to the profile of WesBank, we thought that this was a good thing.”
Mudaru depends solely on his Uber business to earn an income. He signed the deal with WesBank in 2016 and is in the final year of his contract.
“We were gathered in a big room, a boardroom. A person held contracts and explained to us that this was rent-to-own and they will charge us per kilometre, insurance and maintenance covered,” explained Mudaru.
An organisation that advocates for the interests of Uber drivers, The Movement, said that most of the “drivers had no idea of the kind of costs that were going to be involved” in the deal they signed. The deal was presented as if it was going to empower, “but basically it exploited drivers”.
An Uber driver, who spoke on condition of anonymity, echoed The Movement. The driver said WesBank invoices according to kilometres travelled. This amount excludes the petrol costs that the driver incurs and Uber’s commission for every trip. “So you end up paying R5 000 on a vehicle a week, which means you pay a R20 000 instalment a month.”
Mudaru says, “As for me, it has affected me big time because I am married. I have a wife and if your wife sees you waking up at 4am every day but you have no money and … you work at night, on weekends, your children do not see you. You don’t have a social life … and have nothing to show for it.”
With the WesBank deal, you are charged 99c per kilometre regardless of whether you are online in the Uber system or “going to church or shopping with family … they don’t care,” explained Mudaru.
Mabhiza Zubane*, who also signed up for the WesBank programme in 2016 but runs his Uber business part time, said he has to pay Wesbank when he uses the car for personal travel. So, for example, a return trip to his home in Limpopo costs him R2 000.
“The painful thing is that they misled us, because if we had known it was a lease and they’d explained to those of us who don’t understand the difference between a lease and rent-to-own, we were not going to take it,” said Mudaru.
Mudaru said WesBank has refused to give him a copy of the contract he signed. “We signed contracts without reading … and when later we requested copies of the contracts, they have been giving us the runaround.”
WesBank denied this allegation, saying, “Standard practice when entering a lease programme with our Uber driver partners is to provide a copy of their lease agreement. Further copies are also available on request.”
WesBank added that they were always lease contracts and never meant to be rent-to-own contracts.
In hindsight, Mudaru regrets signing the WesBank deal. “Because where I was renting the car, I was paying R2 600 to someone with unlimited kilometres. And why would I do the same thing [with WesBank], where I have no benefit?”
WesBank said it “is still continuing with the programme. However, numerous driver-partners prefer a rent-to-own option on their vehicles, which, due to [National Credit Act] restrictions, WesBank cannot offer.”
But Uber drivers have said WesBank told them it could no longer run the programme, because it was too expensive. They were then advised to join Pace Fleet Services, which provides vehicle solutions to Uber.
Pace offered WesBank a rent-to-own solution for their existing driver-partners. But Zubane said the new Pace deal was more expensive than the current deal with WesBank. “iProblem esinayo ideal yePace aayi iyabheda, iyabheda” (The problem we have is that the deal offered by Pace is too bad), lamented Zubane.
WesBank said they informed drivers in a meeting that there was “no obligation to transfer to Pace and, should drivers wish, they could remain with WesBank”.
Zubane and Mudaru are concerned about ending their contracts with WesBank without knowing the consequences of doing so and having not gained materially through the programme. Adding to the uncertainty is that the car licence discs are in their names. They believe this was done to shield WesBank from e-toll charges and any possible traffic fines.
Still not creditworthy
“You can check, the normal instalment a month of the car I drive is around R3 000-something, but I have been paying R10 000 or more a month,” said Mudaru. And there is no financial institution that will approve an application for vehicle finance, because his credit status has not improved.
Zubane has a similar story. He said that despite paying more than R200 000 in the past two-and-a-half years, the settlement deal for him to purchase the car — to buy himself out of the contract — is R135 000. We asked, “Why can’t WesBank offer us vehicle finance? Because we do not have cash, bathi bona abayingeni leyo, they want cash,” he said.
“Njenga manje mina, bengilokhu ngireyza imali yakhona, ayihlangani. As we speak, bengikhulume nentwana yakithi ukuthi ihlanganise icredit card nami ngihlanganise” (As we speak, I have been trying to collect the settlement money, but I am struggling. I have even asked my brother to get a credit card to help me.)
“They were supposed to consider that ‘we have been working with this person’ and propose a better settlement for drivers to own cars,” said Zubane.
Though WesBank took care of the car, Mudaru feels it was through the money he makes anyway. Despite being on the programme for three years, Mudaru has nothing to show for it. He still cannot afford a car and start his own business. “We have invested. We want those cars to be ours, because we have paid for them,” said Mudaru.
At the time of publication, Pace had not responded to questions. Uber did not comment on questions sent to them, telling New Frame to direct questions to WesBank. — New Frame
* Samuel Mudaru and Mabhiza Zubane are not their real names. The Uber drivers spoke on condition of anonymity as they fear possible intimidation for speaking out.