upper waypoint

One Uber Driver's Story: How He Was Trapped by Auto-Loan Program

Save ArticleSave Article
Failed to save article

Please try again

Richard Brunelle and his wife, Barbara Lynn, feel trapped by a car loan they got through Uber's financing program. (Sam Harnett/KQED)

Richard Brunelle says he feels trapped. He says he has to drive for Uber.

The San Leandro man needs to make money for car payments. His 48-month loan is costing him $1,000 a month and has a 22.75 percent interest rate. He says he got into this mess through a vehicle financing program Uber created for drivers with poor or nonexistent credit.

One Uber Driver's Story: How He Was Trapped by Auto-Loan Program

One Uber Driver's Story: How He Was Trapped by Auto-Loan Program

Since November 2013, Uber has been signing up drivers without cars or the credit to get one. The ride-service company connects drivers with car dealerships and a variety of lenders, some of which specialize in subprime auto loans. It promises to get them a car in less than a week.

The promotional video for the program says: “Everyone deserves to have a success story. Let Uber be part of yours.”


Uber says it created the financing program after hearing from potential drivers that they couldn't get cars. It has not released data on exactly how many drivers have used the program, but Uber says thousands have signed up.

Here's Uber's pitch for why banks should give loans to people with no credit: Its drivers are a safe bet regardless of their credit scores because they have a steady source of income -- the money they make driving. Economist William Black says that's faulty logic.

Black is a former bank regulator who researches and writes on subprime auto loans. He says it's risky to give these loans to people with poor credit. In the case of Uber drivers, Black says, all kinds of things could go wrong and prevent them from making the high-interest car payments.

For instance, driver income could change overnight if Uber decides to cut its rates, which it has done repeatedly. Drivers could get sick or injured. If they don't have savings, which many people with poor credit do not, drivers won't be able to make the payments and the car could get repossessed.

The “bottom line is, you need to underwrite these individuals,” Black says. In other words, the drivers should have co-signers for the loans. And they don't.

Instead, Uber is working with lenders such as Santander Consumer USA, the American consumer finance unit of a Spanish banking group. The subsidiary has a history of regulatory problems. These lenders make subprime auto loans, charging high interest rates to people with no credit or bad credit.

Brunelle, 58, started driving for Uber last August. He thought it would be a nice retirement job after working in the Navy, in a prison, in construction and as a truck driver. But Brunelle didn't have a car -- he rode a motorcycle -- and he says he had no credit because he'd always avoided credit cards. His wife told him about Uber's financing program and he decided to give it a try.

Uber connected Brunelle to a dealership and lender. Things did not go smoothly from there.

Brunelle says the dealer sold him a car that didn't qualify for the discount Uber promises as part of the financial package. He says the dealer also quoted him a different rate verbally than the rate on the paperwork he signed.

When Brunelle got home, he realized he had signed a loan with a 22.75 percent interest rate. That means he will end up paying  around $49,000 on a Kia Optima that normally retails for about $25,000.

“I tried to refinance this car last week and there's just too much overhead on the car right now that I can't get a re-fi on it," Brunelle says.

The dealer won't take the car back and Uber won't help him try to sort this out, says Brunelle. Now the loan is “like a ball and chain," he says.

He says the financing program is just a scheme to get more drivers on the road so that Uber can make more profits. He says, “I feel like Uber not only tossed us to these wolves, but they intentionally did it and they are making bank on it.”

Richard Brunelle says he has to work most of the week just to cover his 22.75 percent interest car loan and driving expenses.
Richard Brunelle says he has to work most of the week just to cover his 22.75 percent interest car loan and driving expenses. (Sam Harnett/KQED)

In a written statement, Uber says it is proud of the program, and that it helps people get cars who normally couldn't.

Uber adds “that the agreement is between the driver and the lender -- rates are determined by the lender and the purchaser must agree to the rates.”

In other words, drivers are on their own when it comes to finalizing the financial deal.

As far as Brunelle's specific situation, Uber says: "We provide drivers with a list of specific cars where an Uber discount applies, and the Kia Optima is not on the list. However, drivers are free to choose whatever car they’d like."

The company says drivers should be able to make the loan payments for these cars by working 10 hours a week. But Brunelle says that math doesn't work out.

After Uber cut drivers' rates again last fall, Brunelle says he's working most of the week just to cover his loan payments and driving expenses. He's working just to break even.

Now he is posting on forums, warning other drivers not to take the financing. Otherwise, he says, they could end up trapped like him.

lower waypoint
next waypoint
Newsom Says California Water Tunnel Will Cost $20 Billion. Officials and Experts Say It's Worth ItDavid DePape Sentenced to 30 Years in Federal Prison for Attack on Nancy Pelosi's HusbandProsecutors to Push for Terrorism Enhancement in Sentencing of David DePape, Who Bludgeoned Paul Pelosi in 2022Sonoma State University's Deal With Student Protesters in Limbo After President's RemovalUC Santa Cruz Academic Workers to Strike Over University's Treatment of Pro-Palestinian ProtestersHighway 1 to Big Sur Has Reopened — What to Know About Visiting from the Bay AreaAt the California GOP Convention, Optimism About NovemberDutch Research Team Recounts the Long-Term Effects of StarvationCalifornia Wants Cities to Plan For More Housing. Cities Say the Rules Are UnclearA Wedding Behind the Walls of San Quentin