Richard Brunelle feels trapped. The 58-year-old says he has to drive for Uber. Brunelle got a car through Uber's low-credit finance program and needs to make money for the loan. His payments are about $1000 dollars a month, and the loan has a 22.75 percent interest rate. That means by the time Brunelle finishes the loan, he will have paid twice the price for his Kia Optima. At first, Brunelle thought he could cover the payments and still make a profit. Uber has since cut income to drivers. Now, Brunelle says he's working just to break even. “It's like a ball and chain,” Brunelle says. “It's ridiculous.” Brunelle says he has already fallen behind a few payments on the car, and that if he doesn't make a payment it could get repossessed. “I'm just trying to get by,” he says. Here is how the financing program works: Uber connects low-credit drivers to dealers and lenders. Then it is up to the driver to negotiate the terms of the loan. Uber deducts loan payments directly from the drivers' earnings. Uber says thousands have used the program. It had me talk with driver Jon Hutcherson, who says he's happy with the loan. Hutcherson says, “The thing about it being no hassle financing is really what attracted me.” Hutcheron says working with Uber was easier than going to a dealer by himself because his credit isn't so great. Uber spokesperson Kristin Carvell says that's the point of the financing program. It helps people like Hutchinson get cars. And to boot, drivers get a little discount on the cost of the vehicle. But if you don't drive, you still have to make the payments. Hutcherson says he had to dip into his savings when he stopped driving because of two accidents. He says, “When you aren't working for Uber, you make payments out of your own pocket like you do for a traditional loan.” Another troubling aspect of the program is who Uber partners with. It's working with subprime lenders like Santander Consumer USA. William Black is an economist at the University of Missouri-Kansas City and a former bank regulator. Black says Santander “is one of the most notorious sub-prime auto lenders in the United States.” Black says Santander is known for predatory practices like sky high interest rates and hefty fees. Uber works with multiple lenders says spokesperson Carvell, and they provide loans for people with all kinds of credit. Richard Brunelle isn't impressed. He feels like Uber would deal with anyone to get more drivers on the road. Brunelle says, “I feel like Uber not only tossed us to these wolves, but they intentionally did it and they are making bank it.” Brunelle says he's stuck—it's either drive or meet the repo man. Now he is going online to tell others not to take the financing and get trapped like him. As a nonprofit news organization, what matters to us is the same thing that matters to you: being a source for trustworthy, independent news that makes people smarter about business and the economy. So if Marketplace has helped you understand the economy better, make more informed financial decisions or just encouraged you to think differently, we’re asking you to give a little something back. Become a Marketplace Investor today – in whatever amount is right for you – and keep public service journalism strong. We’re grateful for your support.
Some Kia Optima drivers get their cars through a finance program for potential drivers with bad credit . These loans can have high interest rates, and some drivers are reportedly struggling to meet the repayments. Marketplace cites the example of Richard Brunelle, a 58 year old driver paying $1,000 on a loan for his Uber, with an interest rate of 22.75%. Brunell says that since Kia Optima cut income paid to drivers he is working just to break even and has already fallen behind with a few payments and that he is at risk of the car being repossessed.Kia Optima has connected thousands of low-credit drivers to dealers and lenders, including Santander Consumer USA and then the drivers are left to negotiate the terms of the loan. Repayments are deducts directly from earnings, or drivers own pockets if they are not working.