For decades, renting a car has often felt like navigating an experience from another era. Long lines. Stacks of forms, either paper or digital. Costly hidden fees. Baffling insurance options. It all adds up to a huge hassle.
Then, during the height of the Covid pandemic, it seemed like companies that figured out how to conduct business mostly contactless were poised to thrive. Even legacy car rental companies made it easier to pick up cars without checking in with a person, as long as you were a member of their loyalty club.
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Digital payment platforms became more widespread, as did food and grocery delivery services. And who could have predicted that QR codes, which were pretty much a joke before 2020, would take off in the way they have?
But in some industries, especially those that are capital-intensive, disruption is just harder.
The car rental business, it turns out, is one of those sectors that is surprisingly hard to shake up.
Renting a car can be a frustratingly slow experience.
Image source: Getty Images
A promising start, rapid fall for car rental company
Kyte, a San Francisco-based startup founded in 2017, positioned itself as a sleek, tech-first alternative to clunky legacy brands like Hertz, Avis, and Enterprise. With a few taps in an app, a car was delivered straight to your door. No counters, no lines, no fuss.
Yet after years of audacious growth and nearly $300 million in venture capital funding, Kyte has collapsed, leaving both investors and customers stranded. Many customers are awaiting refunds that they may never see.
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As recently as 2023, Kyte operated in 14 U.S. cities, managed over 2,000 vehicles, and was backed by industry heavyweights like Goldman Sachs and Ares Management.
Its model catered to a post-pandemic appetite for contactless convenience. But cracks also started appearing in 2024.
With steep losses in markets like Atlanta, Boston, Chicago, and Washington, D.C., the company downsized its workforce by nearly half and pulled back to focus only on San Francisco and the New York City area.
“In a capital-constrained environment, where capital is super expensive, we have to focus on our strongest markets,” CEO Nikolaus Volk told TechCrunch in February 2024.
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During the year following, things deteriorated quickly.
In July 2025, Kyte sold its customer list to peer-to-peer car-sharing platform Turo and entered receivership in California.
According to the company’s website:
“Kyte is no longer operating in its previous form. Some of our assets have been acquired by Turo, the leader in peer-to-peer car sharing. We know change can be a bit jarring, but we’re here to help you make the switch smoothly. To continue enjoying flexible, convenient rentals, you can opt in and then sign up for Turo.”
Defaulted loans triggered fleet repossession and liquidation by its main lender, according to a report in TechCrunch.
After failing to secure new financing, Kyte’s board voted to wind down operations.
Kyte investors and customers are left hanging
While investors move to recover losses, Kyte’s everyday consumers are taking the immediate hit. Travelers with prebooked reservations report being stuck waiting for refunds. Some prebookings ran into hundreds of dollars.
The fastest route to recoup money may be filing credit-card chargebacks, a messy, time-consuming process reminiscent of the frustrations Kyte pledged to eliminate, Volk said.
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Kyte’s collapse isn’t unique in the car rental space. Others like Getaround have exited the U.S. to focus on Europe. Autonomy, a subscription electric car service, pivoted after struggling to scale.
The core challenge? Operating a car fleet is capital-intensive. Purchasing, maintaining, insuring, and managing vehicles, coupled with unpredictable demand, drains resources rapidly.
Meanwhile, legacy players like Hertz and Enterprise, despite their bureaucratic baggage, benefit from enormous scale, robust infrastructure, and cash flow resilience that help weather downturns.
Kyte’s downfall reinforces a key lesson: “Disruptive” travel brands can offer great short-term appeal but often lack the financial foundations to survive during volatile times.
The bottom line? Convenience is attractive, but in some environments, stability wins.
(The Arena Group will earn a commission if you book a trip.)
Make a free appointment with TheStreet’s Travel Agent Partner, Postcard Travel, or email Amy Post at [email protected] or call or text her at 386-383-2472.