 Damage to tracks caused by the harsh winter of 1886/7, falling income, and rising infrastructure costs, and other circumstances beyond the control of the company, led to the company being liquidated in 1889; the eastward route to Holderness Road was sold to the "Drypool and Marfleet Steam Tramways Company" in 1891.In 1895 an agreement for the Hull Corporation to purchase the company was reached – the price being £12,500; the undertaking was temporarily leased to W. Nettleton from 18 October of the same year.By November 1896 the decision had been made to run the tram system as a municipal enterprise, and the decision was made to convert it to an electric tram system.