Uber Strikes Deal To Lower The Cost Of Car Ownership For Drivers (opens in new tab)

I think we've already seen something like this in practice. One missing piece: let's make money by betting that these drivers won't be able to pay the loans.

You have just described Addison Lee in the UK: http://www.addisonlee.com/

How is this different from a loan to start any business?

Convenience and reliability. Lots of people have stories of cabs never showing up, or taking forever, or barking and grumbling when offered a credit card as payment. Particularly if you're in a hurry, paying with a credit card also seems to take a lifetime – at least with cabs that use the paper carbon copy method (which they do here in Seattle).

Uber experience: you open the app and see on a map where all the cars are. It tells you exactly how many minutes the closest cab will take to arrive. When you arrive at your destination, you just hop out. The app knows what credit cards your account has on file and will just charge the one marked as the default or the one you've selected. There's no tipping. If you're in a hurry, not having to wait around to sort out the payment is a big deal.

I've never had an Uber not arrive or arrive exceptionally late; when I've had a less than stellar experience, customer service has been extremely responsive and offers refunds. On a recent trip, the driver made a poor route choice just because there ended up being a bunch of construction downtown, so it ended up taking longer than it could have. Customer service adjusted my fare to what it would have been had we taken the optimal route.

My guess is they're pitching themselves to investors as a logistics company with far larger aspiration than just replacing taxi's. They want to replace Fedex too. It's the only way to justify their valuation. A lot is possible once you have a network of locked-in, under-employed workers available at the push of a button. Point-to-point deliveries are a lot harder to pull off than the old hub and spoke model, but Uber have put a lot of the foundation in place to move into other types of point-to-point deliveries.

It's a little difficult to say for sure, there's not enough information in the article to judge (e.g. No info on lease length) Since it is in effect a structured loan, any advantage is better expressed in terms of interest rate improvements over a non-Uber lease.

While adding more Uber drivers does directly increase the number of cars on the road, that growth could be offsetted (not sure about the actual numbers) by people deciding they can rely on mass transit + Uber instead of driving a car.

Or it just means that there are more Uber drivers and less taxi drivers.