Car-sharing startups take US loans after Covid-19 disruptions

Getaround Inc.and Turo Inc., car-sharing companies that have been valued at more than$1 billion by private investors, said Monday that each took at least $5 million through the USPaycheck Protection Program, a government program intended to help small businesses ride out the disruptions caused by the coronavirus pandemic.

The logo for Turo Inc. is displayed on a smartphone. (Bloomberg)
The logo for Turo Inc. is displayed on a smartphone.

The San Francisco-basedstartups are among the most valuable technology companiesto say theyapplied for and kept financial aid from the loanprogram after Covid-19 levied a severe toll on the transportation business. Several large companies, including Shake Shack Inc., gave back the money under public pressure.

According to federal data released Monday, each company received between $5 million and $10 million in federal loans approved in late April.Some companies included on the list of loan recipients have said they did not actually apply for or accept the money, castingsome doubt on the official data, but Getaround and Turo bothconfirmed they’d taken the loans, though they didn’t respond to questions about their exact values.

Also check these Cars

Find more Cars
Mahindra Xuv300 Turbo Sport (HT Auto photo)
₹10.35 - 12.9 Lakhs**Ex-showroom price
Add to compare
Check latest offers
Mercedes-benz Amg E53 Cabriolet (HT Auto photo)
2999 cc | Petrol | Automatic
₹1.3 Cr**Ex-showroom price
Add to compare
Maruti Suzuki Ytb (HT Auto photo)
UPCOMING
₹7 - 11 Lakhs* *Expected Price
View Details
Maserati Mc20 (HT Auto photo)
₹3.69 Cr**Ex-showroom price
Add to compare
Check latest offers
Maruti Suzuki Baleno (HT Auto photo)
1197 cc | Petrol | Manual
₹6.5 - 10 Lakhs**Ex-showroom price
Add to compare
Check latest offers
Maruti Suzuki S-presso (HT Auto photo)
₹4.25 - 5.99 Lakhs**Ex-showroom price
Add to compare
Check latest offers

Also Read : Car-sharing companies are taking a less germ-infested route in Covid-19 times

“On a global basis, our business was drastically impacted by the lockdowns and restrictions stemming from the coronavirus pandemic," Getaround said in an emailed statement. “The PPP program helped reduce the otherwise severe impact on the health of our organization. In turn, this enabled us to continue providing an essential service to the communities we serve."

“PPP funds were a lifeline for our 244 employees and our community of hosts and guests who rely on Turo to offset the cost of owning a car and travel affordably," Steve Webb, a spokesman for Turo, wrote in an emailed statement. “At a time when millions of Americans are struggling to make ends meet, we’re proud that our marketplace is still here to help folks generate extra revenue."

Investors once had high expectations for car-sharing.SoftBank’s $100 billion Vision Fund made a sizable investment in Getaround in 2018. But theindustry, which had shaky financial prospects even before the pandemic hit, was devastated by Covid-19. Few people wanted to ride insomeone else’s private vehicle, and local stay-at-home restrictions in major cities ground most automotive transportation to a standstill.

Also Read : Fearing germs on steering wheels, Japanese shun car-sharing amid Covid-19

Getaround and Turoboth made sharp job cuts in March, and Getaround began shopping around for a potential acquirer. Some people who rented out their cars on Getaround complained that it had become increasingly difficult to get the company to pay for damages. While cars have begun to return to the roads in recent months, the startups still face major challenges.

The Paycheck Protection Program was established in March as a series of loans for small businesses that would be forgiven if therecipients avoided staff cuts and met other criteria. The program was renewed in April after the initial $350 billion was quickly exhausted. Some startups—and even some Uber drivers—applied for loans, leading to a backlash, while others shied away from claiming them after deciding the conditions were too confusing.

First Published Date: 07 Jul 2020, 10:01 AM IST
Recommended for you
View all
NEXT ARTICLE BEGINS
Shopping Bag Shop Now
55% OFF
SOFTSPUN Microfiber Cloth - 4 pcs - 40x40 cms - 340 GSM Grey- Thick Lint & Streak-Free Multipurpose Cloths - Automotive Microfibre Towels for Car Bike Cleaning Polishing Washing & Detailing…
Rs. 269 Rs. 604
19% OFF
Involve Your Senses One Musk Organic Car Perfume, Involve Your Senses Strong Fiber Air Freshener to Freshen'up Your Car - IONE01-40 g,Car Accessories interior car perfumes and fresheners
Rs. 324 Rs. 399
73% OFF
pTron Bullet Pro 36W PD Quick Charger, 3 Port Fast Car Charger Adapter - Compatible with All Smartphones & Tablets (Black)
Rs. 349 Rs. 1,299
9% OFF
ShineXPro Microfiber Car Cleaning Cloth - OG Soft 500 GSM Extra Large (35x75 CM) Microfiber Cloth for Car and Bike - Suede Edging for Scratchless Drying and Detailing (Pack of 2)
Rs. 498 Rs. 549

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city
By clicking "View Offers" you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city