Uber is headquartered in San Francisco, California and operates in hundreds of cities worldwide. Photo courtesy CNN Money
By Sara Ashley O'Brien
(CNN Money) -- Uber is shutting down its car leasing arm that employed some 500 employees.
Meant to lure potential drivers, Uber launched its Xchange Leasing business in 2015 to give the option of leasing vehicles to drivers who might not otherwise be able to obtain a car due to their credit histories.
Xchange Leasing would cover basic maintenance of the vehicles and had no mileage fees for drivers. The company touted it as a "product unlike anything on the market today."
But on Wednesday, it confirmed it was ending the endeavor and would "move towards a less capital-intensive approach."
According to the Wall Street Journal, which first reported that Xchange Leasing would shutter due to mounting losses last month, it was losing $9,000 per vehicle, or about half its sticker-price. That's roughly 18 times the amount projected, the Journal reported. Xchange Leasing, which owns 40,000 vehicles and has about 500 employees, was unable to make the program work, it said.
Uber has made resources available for employees at Xchange Leasing, such as resume and LinkedIn profile building sessions, interviewing skills; recruiting office hours, info sessions on other areas of the business to help workers whose jobs may be impacted, a source familiar told CNN Tech.
Xchange Leasing was available in 19 U.S. markets, according to its website.
It's not immediately clear what would happen to the cars owned by Xchange.
The announcement comes as Uber's new CEO Dara Khosrowshahi seeks to turn around the embattled $68 billion startup.
Prior to Khosrowshahi joining the company at the end of August, the company reported staggering losses of $645 million in the three months that ended in June. Its most recent financial results followed reports that several mutual funds marked down the value of their stakes in the company, which has suffered from one PR crises after another this year.
The company is also still without a chief financial officer.
Khosrowshahi must also weather the company through a handful of other recent crises. They include losing one of its biggest markets, London, an escalating court battle with Google's Waymo over allegedly stolen self-driving car technology, and a Department of Justice investigation into the "Greyball" software to prevent authorities from monitoring the app.