Kyte Shut Down: Rental Car Competitor to Hertz Ceases Operations

Kyte Rental Car Startup Ceases Operations

Kyte, a rental car startup, has officially shut down operations approximately one year following significant staff reductions and a withdrawal from the majority of its U.S. markets.

Sale of Assets and Receivership

The company transferred its customer database to Turo in July. Subsequently, it entered into a receivership process in California, as communicated in a notice to Kyte’s creditors.

Earlier in the year, Kyte experienced difficulties in meeting its loan obligations. This led to the primary lender repossessing and liquidating the company’s entire vehicle fleet.

Attempts to Secure Funding

According to the official notice, Kyte’s board of directors actively sought various financial solutions to maintain the company’s viability.

Despite these efforts, securing necessary funding proved unsuccessful, ultimately resulting in the board’s decision to wind down the business.

Customer Refund Issues

Although the customer list was sold to Turo, numerous users with pre-existing bookings are currently awaiting refunds totaling hundreds of dollars.

Some affected customers have successfully obtained refunds through charge-backs with their credit card providers, while others have been unsuccessful in their attempts.

Kyte CEO Nikolaus Volk advised TechCrunch that initiating a charge-back may be the most expedient route for customers to recover their funds.

Company History and Growth

Established in 2019, Kyte distinguished itself by offering on-demand car rentals with direct delivery to customers’ locations.

The company maintained ownership of its vehicle fleet, positioning it similarly to Zipcar rather than the peer-to-peer model employed by companies like Turo.

Kyte expanded to 14 markets and secured over $300 million in funding throughout its existence, even positioning itself as a strong competitor to Hertz.

Recent Struggles and Restructuring Efforts

Challenges began to emerge in 2024, as reported by Volk to TechCrunch. The company faced difficulties in generating positive cash flow in key markets such as Atlanta, Chicago, Boston, and Washington, D.C.

The team considered a potential sale of the business but ultimately opted for restructuring and concentrating on profitability within its two largest markets: San Francisco and New York City.

Broader Industry Trends

Kyte is not the only startup in the car rental sector to encounter difficulties, particularly within the United States.

Getaround, another peer-to-peer vehicle rental service, ceased its U.S. operations in February of this year to concentrate on its European business.

Furthermore, TrueCar founder Scott Painter shifted away from vehicle subscriptions in 2024 after facing challenges in establishing a successful business, Autonomy.