Evercar suddenly shuts down after expanding to the Bay Area in September.
Another startup renting cars to Uber and Lyft drivers is shutting down.
Evercar, a three-year-old Los Angeles-based service that rents electric and hybrid cars to drivers for delivery and ride-hailing services, sent an email to customers on Monday notifying them that it’s suspending its service. The company expanded its operations to the Bay Area last month, but is now shutting down in both markets.
“Over the past year, our team has worked hard to deliver you a reliable service to help you earn money in the on-demand economy,” the company says in its email to customers. “However, due to unforeseen circumstances, we will not be able to deliver that service in the near term. We truly apologize for the disruption that this has caused you.”
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Evercar lets customers rent out cars for $5 to $8 hourly, depending on the car type and location, to drive for services like Uber and Lyft, along with delivery companies like Postmates and Doordash.
It’s unclear why the startup, which has raised about $29 million (including debt), according to Pitchbook, is ceasing operations so suddenly, but stiff competition could be one reason. In July, a similar company, Breeze, also killed its car rental operations after deciding that continuing to compete against Uber and Lyft’s rival car rental programs would be unsustainable. Instead, Breeze now plans to sell software for managing vehicle fleets to other companies and has since passed on its customers to Uber’s program. Ironically, Breeze had begun renting cars to drivers before Uber and Lyft devised their own programs. While both Uber and Lyft have partnerships with car rental companies for short-term auto rentals for their drivers, Uber also has a long-term leasing program.
At least one similar company, Hyrecar, is still in business.
Evercar’s original business, through which it provides electric vehicles and fleet management tools to customers, including the City of Indianapolis, the City of Atlanta, and federal agencies, will continue to operate, an Evercar spokeswoman told Fortune via email on Tuesday.
Evercar debuted its car rental service in Los Angeles in 2015, where it offered more than 100 cars to 1,200 customers in the area. In a statement last month, Evercar said that it had “financing available to acquire up to 3,000 new vehicles in the coming year.”
An earlier version of this story incorrectly described Evercar’s original business, through which it works with the City of Indianapolis and the City of Atlanta. The story has been updated.