Getaround Shuts Down US Car Sharing

Getaround to Cease U.S. Operations and Close HyreCar

Getaround, a peer-to-peer car sharing platform enabling vehicle owners to rent out their cars, trucks, and SUVs, is discontinuing operations within the United States. This decision arrives just a year following a workforce reduction of 30% across its North American divisions as part of a broader restructuring initiative.

Furthermore, the company’s HyreCar business, which was acquired in 2023 for $9.45 million, will also be shut down.

Shift in Focus to European Markets

According to a regulatory filing made on Wednesday and a subsequent email to U.S. customers, Getaround is now concentrating its efforts on its European business. The company currently operates in six European countries: Norway, Spain, France, Germany, Belgium, and Austria.

The email, reviewed by TechCrunch, strongly advises customers to return all rented vehicles by the end of Wednesday to prevent any lapses in insurance coverage. It also indicates a potential risk of the company being unable to maintain liability insurance provision within the U.S.

Insurance Implications for Customers

Customers who fail to return their rentals by the specified deadline may become personally liable for ensuring adequate liability insurance coverage. Getaround has stated that its car protection program will no longer be valid for vehicles not returned by the end of the day.

This means renters will be financially responsible for any damages incurred after that point.

A History of Growth and Challenges

Founded in 2009 in San Francisco, Getaround gained recognition as a finalist in the 2011 TechCrunch Startup Battlefield. The company’s trajectory has been marked by both significant growth and considerable challenges.

Initially, Getaround attracted substantial venture capital investment, exceeding $750 million from prominent investors. A notable funding round in 2018 saw $300 million led by the SoftBank Vision Fund.

Key Investors and Acquisitions

Other investors in Getaround included Menlo Ventures, PeopleFund, Reid Hoffman, Mark Pincus’ Reinvent Capital, and VectoIQ partners Steve Girsky, Mary Chan, and Julia Steyn.

The company utilized these funds to expand its reach into new cities and, ultimately, into Europe through acquisitions. In 2019, Getaround acquired both Drivy and Norwegian car rental company Nabobil for a combined $300 million.

Public Offering and Subsequent Difficulties

Getaround became a publicly traded company in 2022 via a merger with a special purpose acquisition company (SPAC). However, the company soon encountered financial difficulties.

Within months of its initial public offering, Getaround received a warning of potential delisting from the New York Stock Exchange. This was followed by further layoffs in both 2023 and 2024.

These events ultimately led to the decision to withdraw from the U.S. market and focus on its European operations.

Getaround Announces U.S. Business Closure

On February 7th, the company’s board authorized an “orderly wind down” of its car-sharing operations within the United States. This decision encompasses the termination of employment for all U.S.-based staff, as detailed in a recent regulatory filing made public on Wednesday.

The majority of affected employees will conclude their roles on February 14th, though a small contingent will remain temporarily to facilitate the business closure process.

Getaround anticipates incurring expenses ranging from $1.5 million to $2 million related to this workforce reduction.

Impact on Customers

Existing and prospective Getaround renters may experience disruption due to this planned closure. An email communication to customers indicated that rental support, including insurance, would be maintained only through Wednesday’s end.

This limited timeframe leaves renters with minimal opportunity to return their vehicles. Furthermore, all future rental bookings within the U.S. have been canceled.

The company stated it is actively collaborating with vehicle owners and drivers to expedite vehicle returns.

Outstanding claims and financial balances will be addressed as part of the wind-down procedures, according to the communication.

Leadership Transition and Financial Challenges

AJ Lee, currently serving as Interim CEO and COO, will be departing from his position. He released a statement acknowledging the difficulty of the decision.

Lee explained that the choice followed a thorough evaluation of available strategic alternatives and was not undertaken lightly.

Despite notable gains in profitability and comprehensive restructuring initiatives, the company has struggled with persistent liquidity issues. These challenges ultimately rendered continued U.S. operations unsustainable.

The lack of sufficient capital has made it impossible to maintain operations in the United States.