Out-Law / Your Daily Need-To-Know

Uber car rental scheme puts entrepreneurs on the road in South Africa

19 Nov 2015, 12:57 pm

The ride-sharing application Uber has signed an agreement with South African vehicle finance provider WesBank to rent cars to drivers who cannot afford to buy them for their start-up firms.

Uber said its ‘vehicle solutions programme’, worth around 200 million rand (ZAR) ($14m), “gives those Uber driver-partners who may not qualify for traditional credit the opportunity of a full vehicle maintenance lease, facilitated by WesBank, at special rates”.

“This is an amazing chance for driver-partners to start and grow their own small business in partnership with Uber,” the company said. Instead of basing access to the programme on credit ratings, “drivers will be considered… based on their earnings and quality record with Uber”.

The programme is not limited to existing driver-partners or those with a record of income with Uber, the company said.

“Several rental companies have launched short-term rental offerings for prospective drivers wanting to operate on the Uber platform,” Uber said. “Drivers can rent approved vehicles from Hertz, Europcar, Pace and Fleet Data Technologies until they have built the earnings and quality record needed to qualify for the full maintenance lease facilitated through WesBank.”

“This partnership ensures everyone in the transport industry, whether they are working on the Uber platform or not, has the opportunity to become an entrepreneur and enjoy the flexibility and enhanced earnings potential, and better quality of life, of being their own boss,” Uber said.

Uber said the programme was developed with WesBank, a division of South Africa’s FirstRand Bank Limited, in collaboration with the Enterprise Development Fund, Vumela.

Vumela, which is managed by South Africa’s First National Bank and Edge Growth, has pledged ZAR 20m for the first 1,000 vehicles under the South African scheme, Uber said.

Earlier this year, South Africa’s president Jacob Zuma said the government and business leaders had agreed to work towards establishing “simplified processes” for setting up small and medium-sized enterprises (SMEs) in the country.

Zuma said the feasibility of launching a “single point registration process” was also being considered, to help SMEs comply more easily with a range of regulatory requirements such as VAT and pay as you earn (PAYE) reporting.

South Africa’s 2015 budget, unveiled by finance minister Nhlanhla Nene last February, said support for small firms and infrastructure investment was among nine national “strategic priorities”, many of which are expected to involve public-private partnerships.