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Founder of SoftBank-backed car leasing startup resigns after layoffs

Founder of SoftBank-backed car leasing startup resigns after layoffs


A SoftBank partner is taking over the company

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Image: Fair

Scott Painter, the founder of SoftBank-backed car leasing startup, has resigned as CEO following last week’s layoffs and announcement of a planned restructuring, The Verge has learned. SoftBank’s Adam Hieber is taking over as interim CEO. Painter will stay on as chairman of Fair. His brother, who was Fair’s CFO, left the company last week.

“As I’ve said so often in the last few days - - what we do hasn’t changed; how we do it must change,” Painter said in an email to staff that was obtained by The Verge. “I’m so incredibly proud of the company and the team we have built, and I’m not going anywhere. I will continue to be Fair’s fiercest advocate, and I’m here to support the entire team, including the team of experts we’ve brought in to help sharpen Fair’s focus on sustainable growth.”

Painter confirmed the news in a message to The Verge. “I am not leaving the company at all. Different skill sets are needed during different phases of a companies growth. Right now Adam and our new additions to the leadership team will confirm our commitment to being a profitable business,” he wrote. “Successful companies MUST operate and grow in a sustainable manner and ultimately be profitable. The decisions that get made while growing a game changing business at speed are tough but they are necessary if you are going to build enduring companies.”

Painter founded Fair in 2016 after founding and selling TrueCar, a massive automotive buyers’ guide website. The company grew to around 700 employees over the last three years, and bought up a few similar car leasing and subscription startups along the way.

Fair acquired Uber’s leasing subsidiary (Xchange Leasing) around the end of 2017, just a few months after Dara Khosrowshahi replaced Uber co-founder Travis Kalanick as CEO. Shutting down Xchange Leasing was one of Khosrowshahi’s first cost-cutting moves after the company wound up losing far more money on each lease than it had originally estimated. SoftBank invested $385 million in the startup shortly thereafter, skyrocketing its valuation past $1 billion.

Fair also bought Ford’s Canvas subscription platform earlier this year. At the time, the startup claimed it would be adding Canvas’ customers to an existing base of about 45,000 monthly users in the US. But three current and former employees who’ve spoken to The Verge on the condition of anonymity have called those numbers into question, saying they were inflated.

Things seemed to turn south in recent weeks for Fair customers, with some reporting sudden and uncharacteristically massive down payments for monthly car subscriptions on the platform.

At the same time, the employees say, SoftBank pushed fair to trim operating costs across a number of meetings with Fair’s leadership over the last month, ultimately leading to last week’s layoffs of 40 percent of the staff. The Japanese tech giant has been looking to pare losses in its myriad investments after big bets on Uber and the calamitous WeWork have turned sour.

“SoftBank, despite what is going on in the media, has been a steadfast supporter of mine and this business,” Painter told The Verge on Wednesday. “This pivot flatly would not be possible without their full support and engagement. This is a development that I welcome completely.”

In his message announcing last week’s layoffs, Painter said he had decided to focus the Fair’s resources on strengthening “core technology and reducing costs associated with the capital-intensive supply side of our business,” which would require a smaller team “focused on doing fewer things well.”

Update October 30th, 6:21PM ET: Added comment from Scott Painter.