Uber’s Xchange program offers short-term car leases to drivers who work for the company, catering to people who have been rejected by other lenders. But the program has critics who accuse the company of looting the pockets of its drivers.

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In its relentless pursuit of growth, Uber needs new drivers, and many of those drivers need cars.

To help them get started, Uber began offering short-term leases since July through a wholly owned Delaware-based subsidiary called Xchange Leasing. It partners with auto dealerships, advertises to drivers, manages risk and even pays repo men to chase down cars whose drivers aren’t making their payments.

Xchange may be key to Uber’s continued expansion as it tangles with Lyft in the U.S. and competitors abroad.

Uber announced a partnership with Toyota last week to finance even more cars. This year, Uber said its financing and discount programs, which include Xchange, will put more than 100,000 drivers on the road. That requires dipping into the vast pool of people with bad or no credit.

In a deal led by Goldman Sachs, Xchange received a $1 billion credit facility to fund new car leases, according to a person familiar with the matter. The deal will help Uber grow its U.S. subprime auto-leasing business and it will give many of the world’s biggest financial institutions exposure to the company’s auto leases. The credit facility is basically a line of credit that Xchange can use to lease out cars to Uber drivers.

Xchange, which caters to people who have been rejected by other lenders, isn’t intended to be a moneymaker, said an Uber spokesman. But it has plenty of critics who accuse the company of looting the pockets of its drivers.

The program is plagued by a lot of questions that surround other subprime-lending programs aimed at risky borrowers with bad credit. Is Xchange really offering good deals? Does it ensnare drivers with commitments they can’t meet?

“You can buy the car for what they’re charging you in weekly payments,” said Greg McBride, chief financial analyst at personal-finance website Bankrate.com.

But for many drivers who sign up with Xchange, it’s their only option.

The terms of an Xchange lease run 28 pages. Drivers pay a $250 upfront deposit, then make weekly payments to Uber over the course of the three-year life of the lease. As the video promoting the arrangement puts it: “The best part: Payments are automatically deducted from your Uber earnings.”

At the end of three years, Uber keeps the $250 deposit to release the drivers from the lease. If they want to buy it, they’ll need to fork over the residual value of the car, which could run many thousands of dollars. Uber declined to provide an average figure.

Uber’s lease is more flexible than most subprime leases, the company said. After the first 30 days, a driver can return the car to Uber with two weeks’ notice, without any additional fees, apart from the payments they owe and the $250 they paid up front.

Many other leases charge drivers by the mile if they exceed a certain mileage threshold. Not Xchange, though; Uber wants to incentivize drivers to keep logging miles.

Drivers’ experience

Bloomberg News spoke to a half-dozen drivers who have leases through Xchange. For the most part, drivers saw Xchange as their only way to get a car. Xchange was a solution to Shawn Hofstede’s money problems at first.

Hofstede, 30, started driving for Uber in the Dallas-Fort Worth area last year, using his own car. But then, during an accident on his own time, he wrecked the car and was left without the income. “I was literally screwed,” he said. Then Uber emailed him about its financing options.

He leased a 2016 Toyota Corolla from Xchange in November, paying $155 a week. Two months later, Uber slashed fares nationally. Soon Hofstede had trouble keeping up with his payments. He went from making $200 in a weekend to $140 in a weekend, he said.

“It got to the point that I would drive just to meet my payment,” he said. “If you were short on your payment for a week it would roll onto the payment for next week. It starts adding up.”

Eventually, Hofstede stopped driving. The car was repossessed a few months later.

Bloomberg spoke to five auto-finance experts. Most said the leases are expensive, even predatory, compared with leases available to drivers with good credit.

“I’d say the cost is greater than the benefit for your average driver,” said Mark Williams, a lecturer at Boston University’s business school who reviewed the terms of a blank lease agreement provided by Uber, along with some average weekly lease payments and a driver-reported account. “The terms, the way they’re proposed, are predatory and are very much driven toward profiting off drivers rather than to facilitate an increase in drivers.”

Uber said the program isn’t meant to generate a profit, but to get more drivers in cars. They said the lease is structured so drivers can get out of it at any time.

Besides unlimited mileage, Uber’s lease also includes routine maintenance. The company also said returning the vehicle won’t impact a driver’s credit score, unlike other financing arrangements.

“They’re making it easier to walk away, which is a good thing, but they’re making it pretty expensive throughout,” said John Van Alst, a leasing expert at the National Consumer Law Center.

The average weekly payment for a lease on a new car was $96 during the last three months of 2015, according to credit agency Experian. That’s for everyone with all kinds of credit ratings.

A typical 2013 Toyota Camry L through Xchange runs $130 a week, according to Uber.

Xchange leases are generally comparable to the terms of other subprime and deep-prime leases, experts said. That means leases can run far above the car’s real value.

In a statement sent by Uber, Andrew Chapin, who runs Xchange, said: “Many Americans don’t have enough cash on hand to buy a car. Many others could be denied leases or charged high rates due to their credit quality, and could owe thousands of dollars in penalties if they break the contract early. Xchange provides access to high-quality cars with no restrictions on mileage (unlike most leases) and the ability to break the lease early with minimal fees.”

Taking bigger risks

In June 2015, Brandie Schmitt, 24, found herself broke in Los Angeles with what she called a “terrible” credit score. Five years earlier, a seizure put her in the hospital. Medical bills piled up, along with student debt for classes she never attended.

She worked at Papa John’s for a while, but then her hours got cut, and anyway, the two hour-plus bus ride to work was killing her.

After dropping $250 up front for her lease of a 2015 Honda Civic, she pays $160 a week to Xchange. If she keeps the car for the full three-year term, she’ll end up paying Uber $25,210. The Kelley Blue Book fair purchase price for a new 2015 Honda Civic SE in Los Angeles is $18,142.

Schmitt said she’ll need to pay Uber $5,000 or so more to buy the car if she wants to keep it at the end of her lease.

Schmitt was referred to Bloomberg News by Uber. She drives about 25 hours a week. In one week in May, she earned $604 for 28 hours of work, she said — a slightly better-than-average week. Uber took $160 for the car directly out of her paycheck, leaving her with $444.

“It’s been building my credit,” she said. “It’s expensive … but that’s because my credit isn’t that great.”

Uber’s program is willing to take bigger risks on lease applicants than most traditional leasing programs, the company said. It has more reason to believe that someone will be able to pay them back, because they’ll be making money driving for Uber, and the company gets their money before it pays the driver.

Chapin said catering to drivers with bad credit is intentional. “Just as Uber is changing the nature of car ownership for riders, it’s changing the nature of car ownership for drivers,” he said.

Muhanad K. started driving for Uber in September 2014 after having fled his war-torn home country. (He declined to share his full name or the country out of fear he could endanger his family abroad.) After a few months, his car broke down.

With a subprime credit score hovering around 570, Muhanad didn’t think he could get another car. He turned to Xchange. He pays Uber $183 a week for a 2015 Prius.

If Muhanad sticks with the lease for three years, he’ll end up paying Uber $28,798. Kelley Blue Book puts the fair purchase price of a 2015 Toyota Prius at $21,985.

To afford it, Muhanad started pulling longer shifts. Six days a week, he’d sign in to the Uber app at 7 a.m. and work until 11 p.m., limiting himself to a two-hour break.

“I just wanted to make money,” he said. “I come from a place where I survived hell, so this is nothing. But most people probably would not be able to handle this kind of stress.”