Ridesharing offers leasing opportunities

Toyota Financial Services sees the rideshare market as “a global opportunity”, but the right leasing products are not currently available, according to an interview given by Chris Ballinger, senior vice president and chief financial officer, to Auto Finance News.

The product model needs to solve two problems: residual value and credit risk, according to Ballinger. A car used for ridesharing “is going to have much higher mileage than a traditional contract and a fast depreciation,” he said. The model also needs to manage credit risk to “find other ways of securing the payment, perhaps using that income stream to pay the retail of these contracts.”

“Every captive is looking at partnering with players in this emerging [mobility] market,” Ballinger said. There’s also “huge opportunity for captives in the new pay-per-use models and applications.”

Ballinger said: “Ridesharing, car-sharing, ‘last mile’ delivery — all of these are mobility in a broader sense, but are different than the traditional model we finance. It’s financing a car for someone who wants to monetize it and turn it into an income-rising asset. The trick is to develop new finance models.”