Getaround, a platform enabling vehicle owners to rent out cars, trucks, and SUVs to peers, is discontinuing its U.S. operations just one year after a major restructuring that involved a 30% reduction of its North American workforce. Additionally, the HyreCar division, which the company purchased in 2023 for $9.45 million, is also being shut down.
On Wednesday, the company disclosed in a regulatory filing and through an email to U.S. customers that it will now concentrate its efforts on its European operations, which span six countries: Norway, Spain, France, Germany, Belgium, and Austria.
According to an email shared with TechCrunch, the company urged customers to return their rented vehicles by the end of Wednesday in order to maintain insurance coverage, indicating that it is “at risk of being unable to offer liability insurance coverage in the U.S.”
“Failure to do so may leave you personally liable for ensuring adequate liability insurance coverage,” the email states. Getaround also noted that its vehicle protection program would not cover any cars not returned by the end of the day, making customers responsible for any damages incurred.
Founded in 2009 in San Francisco, Getaround was a finalist in the TechCrunch Startup Battlefield in 2011 and has experienced a tumultuous journey.
The company was once favored by venture capitalists, securing over $750 million from notable investors, including $300 million in a 2018 funding round led by the SoftBank Vision Fund. Other prominent backers included Menlo Ventures, PeopleFund, Reid Hoffman, Mark Pincus’ Reinvent Capital, and VectoIQ partners Steve Girsky, Mary Chan, and Julia Steyn, among others.
Getaround utilized this significant funding to expand into additional cities and ultimately into Europe, completing its $300 million acquisition of Drivy and Norwegian car rental company Nabobil in 2019.
The company went public in 2022 through a merger with a special purpose acquisition company but quickly faced challenges, obtaining a delisting warning from the New York Stock Exchange within months of the IPO. Further layoffs followed in both 2023 and 2024.
“Orderly Wind Down”
On February 7, the board approved an “orderly wind down” of the car-sharing operations in the United States, which entails the termination of all U.S. positions, as outlined in its regulatory filing released Wednesday. Most employees will end their roles by February 14, though a few will remain to assist with the closure.
Getaround anticipates incurring costs between $1.5 million and $2 million associated with this workforce reduction.
This orderly wind down could appear chaotic for customers with existing or upcoming Getaround rentals. In its correspondence to customers, Getaround indicated that it would support rentals, including insurance protection, until the end of Wednesday, giving little time for vehicle returns. Additionally, the company has canceled all future U.S. reservations.
“We are collaborating closely with hosts and drivers to facilitate the prompt return of vehicles,” the email stated. “All outstanding claims or balances will be addressed during the winding down process.”
Interim CEO and COO AJ Lee, who will be resigning from the role, commented that the decision has “been extraordinarily challenging, made after thorough consideration of a variety of strategic alternatives.”
Lee noted that “despite notable improvements in overall profitability and extensive restructuring measures, the company has continually struggled with liquidity issues, rendering U.S. operations unsustainable.”
Compiled by Techarena.au.
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