(Credit: Getaround)
US users won't be able to rent a car through Getaround anymore. The company is shutting down operations across the country, citing its struggling financials.
The "ordered wind-down" means the car-sharing app is no longer accepting new rentals in major cities, including San Francisco, Boston, and Miami. The main problem for Getaround has been its struggles to generate a profit, with the company continuing to report net losses.
"Despite significant improvements in overall profitability and extensive restructuring efforts, the company has faced an ongoing lack of liquidity, which has made US operations no longer viable,” the company’s interim CEO AJ Lee said in an announcement.
(Credit: Getaround)Getaround adds that it “engaged in an extensive analysis of all available alternatives” to try and keep its US business running. But the company ultimately concluded it had to pull the plug in order to “maximize the value of Getaround’s assets for all stakeholders.”
In more bad news, the company revealed in an SEC filing that it's laying off a substantial number of US-based employees. Getaround previously had an office in San Francisco, before becoming a remote-first company last year, following an earlier round of layoffs that impacted 30% of its North American workforce.
Getaround was founded in 2009, and became known for letting car owners rent out their vehicles to consumers. But it looks like the company struggled to offset the high costs of maintaining the business, with the operating expenses more than double, or even quadruple, the revenue. Last year, the app also suspended car-sharing operations in New York, citing the “high cost of maintaining the insurance coverage required” under a state law.
Despite the US shutdown, the company will live on in Europe. “Getaround is the leading car-sharing platform in Europe, which makes it uniquely well-suited to accelerate the Company’s path to profitability," Lee said.