# Fair (2016 – 2022)

- URL: https://girisimcikafasi.com/en/startup-graveyard/fair/
- Sector: Mobility and transport
- Country: United States
- Total funding: $2 billion
- Unicorn: yes, peak valuation $1.2 billion
- Cause of closure: Business model failed

## What did it do?

Fair was a Santa Monica car leasing and subscription company founded by Scott Painter in 2016. Customers could choose a used car in an app and pay monthly without signing a long contract. The company later moved to two- and three-year leases. In 2019 it also bought Ford's Canvas subscription business.

## Why did it shut down?

Fair took over Uber's loss-making Xchange Leasing at the end of 2017 and in December 2018 announced USD 385 million led by SoftBank. Fortune reported a USD 1.2 billion valuation for the round. In October 2019, under cost pressure from SoftBank, 40% of staff were laid off, and a week later Painter stepped down as chief executive. In February 2020 the weekly Fair Go programme for Uber drivers was ended, with rising insurance premiums cited as the reason. In May 2022 Shift Technologies bought the dealer marketplace assets for USD 15 million in cash and 2.5% equity. According to Bloomberg, the equity, including SoftBank's stake of about a third, was wiped out.

## The story

With Fair, founded in 2016, Scott Painter wanted to change how people own cars: pick a car on your phone, pay monthly and hand it back when you like.

The idea caught SoftBank's eye. A USD 385 million round announced in December 2018 valued the company at USD 1.2 billion. Fair had also taken over Xchange, Uber's loss-making leasing arm, and was renting cars to drivers by the week. In September 2019 it added Ford's Canvas subscription.

Weeks later the mood changed. Under cost pressure from SoftBank, 40% of staff went in October 2019 and Painter stepped aside. In February 2020 rising insurance premiums ended the Fair Go programme.

The company turned to two- and three-year used-car leases, but that was not enough. In May 2022 the dealer marketplace assets went to Shift for USD 15 million in cash and 2.5% equity, while the fleet and driver contracts were put up for sale. The equity was wiped out.

## Lessons

- Taking over a business someone else was losing money on is not growth. Before buying Xchange, write down what made it unprofitable and what you will do differently.
- Car leasing is really a finance and insurance business. However good your app is, model depreciation and premiums first; a rise in premiums is what ended Fair Go.
- If you depend on one big investor, its priority becomes your strategy. SoftBank wanted lower costs and a 40% layoff followed; keep another route to capital ready.

## Sources

- [Shift acquires assets of Fair.com](https://coverager.com/shift-acquires-assets-of-fair-com/)
- [SoftBank-backed Fair puts the brakes on weekly car rentals for Uber drivers](https://techcrunch.com/2020/02/06/uber-fair-go-shut-down/)
- [Fair: Selected assets and a subsidiary sold to Shift](https://altss.com/unicorn-tracker/fair)