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Uber is offering cheap rental cars to its Denver drivers

Uber is offering cheap rental cars to its Denver drivers


But not cheaper than leasing

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Uber announced Tuesday a partnership with Enterprise Rent-A-Car to provide vehicles to aspiring drivers who don't own a car, the latest move in the company's continuing quest to turn basically every American into a for-hire driver.

The pilot program is only available in Denver, where drivers are being offered a discounted rate of $210 a week to rent a Toyota Corolla through Enterprise. Rental charges are automatically deducted from the drivers' weekly earnings. Uber says it hopes to offer the deal in other cities "soon."

"What we're trying to do here is lower the barrier to entry for someone who does want to work with Uber but who does not have a qualifying car or doesn't have a car at all," Andrew Chapin, Uber's head of vehicle solutions, told The Denver Post.

But what about insurance? Enterprise says it covers the car like a normal rental — for damage exceeding $1,000 — both when the driver is actively searching for fares using Uber's app, and when the app is turned off.

At $840 a month, Uber's deal with Enterprise is exceedingly more expensive than typical leasing rates. In New York, for instance, a Toyota Corolla can be leased for under $200 a month. The rate is cheap for a rental car, though, and may be most attractive to those drivers who don't qualify for financing due to bad credit or unemployment.

Uber wants to "lower the barrier to entry" for aspiring drivers

Much like its new "destinations" feature, in which drivers can earn fares while driving to and from home, the Enterprise partnership is the latest in a series of efforts by Uber to encourage drivers to join its platform and grow its driver network. Over 400,000 people now drive for Uber in the US, both full- and part-time, representing a significant spike from the number of active drivers — 162,000 — the company said it had in December 2014.

But the rental car pilot is also nothing new in the world of ride-sharing. In October, Lyft announced it was renting out SUVs at discounted rates from Hertz for its drivers. And in July, Uber said it would work with Flexdrive, a unit of Cox Automotive, to offer weekly rentals in Atlanta, Dallas, and Nashville. Both ride-hailing companies work with car dealerships to offer new and leased cars to drivers at discounted rates.