Turo: “the Airbnb of Cars” and Its Way to Change the Rental Industry
Founded in 2009, Turo is a car sharing services, where you can rent any car you want, wherever you want it, and when you want it. Owners of the cars can earn extra money when they are not using their car which can then be used for anything they want. Let us look at some of Turo’s main features.
- Available in 3,500+ Cities
- Pick up at 300+ airports
- More than 800 makes and models of cars available
- $2 million insurance policy for users
The company – sometimes referred to as the “Airbnb of car rentals” – was founded in 2009 with operations in San Francisco and Boston, and has since expanded to more than 5,000 cities across the U.S., Canada, Germany, and the U.K. It uses data analytics and competes not only against established car rental giants such as National, Enterprise, Dollar, Avis, and Hertz, but also against similar peer-to-peer (P2P) car-sharing platforms such as Getaround.
Turo has seen rapid growth in the last few years. The car-sharing startup passed the billion-dollar valuation mark. The appeal of the service should be obvious, rent out your car to make some extra money, or rent a car to save money.
Some people may find it weird to be renting cars directly from others, but we all had similar thoughts about Airbnb when it launched. The sharing economy applies to just about everything these days, so it is only natural that a major service came to car rentals. Plus, as an owner, it is a lot easier to make money this way than driving for Uber.
Where Is Turo in Car Sharing Marketplace?
Leasing or owning a car used for ridesharing, as well as personal use, can be extra costly, due to huge down payments, high interest on your monthly payments, frequent gas fill-ups, and increases in car washes and scheduled maintenance services. Which is why many rideshare drivers are saving money by renting their cars. Not from giant, pricey companies like Avis or Hertz, but more affordably through like Turo.
Peer-to-peer car sharing services that let owners rent out their vehicles are a focus of concern from traditional car rental companies, who see disruption ahead. Similar to home sharing services, Turo allows users to rent out their personal vehicle to other users and markets itself as a rental car alternative for consumers.
“Peer-to-peer car-sharing enables these car owners to earn money when they’re not using it,” said Andre Haddad, the CEO of Turo. “Way better than a rental car.” That is how Turo, a vehicle-sharing marketplace that wants to be the Airbnb of cars, describes itself on its homepage. Despite that seemingly antagonistic stance, CEO Andre Haddad told the Wall Street Journal that they are not intending to antagonize, also known as traditional car rental companies.
But the hosts running car-sharing rental fleets like business ventures may undermine those payoffs. When it started life in 2009 under the name RelayRides, Turo offered hourly or daily rentals using personally owned vehicles. Later, it moved to bookings on a 24-hour basis. Over time, the quality of many cars available on the Turo platform moved upwards, as the company distinguished itself by offering higher-end vehicles. Observers surmise that a large share of the company’s revenue is generated by “power hosts” who rent multiple vehicles on the platform.
Critics say, they are establishing miniature rental businesses, without paying any of the fees or taxes that such companies must pay. “Is this really a peer-based model anymore?” said Shaheen. “That’s one of the questions that has been raised.”
Steven Webb, Turo’s director of communications, says that 95 percent of the platform’s hosts rent out three or fewer vehicles. “The audience and mission of company is focused on individual hosts rather than on enabling the car rental companies to operate on Turo,” he said. But he would not say how much revenue the startup derives from the smaller number of hosts who run businesses off it.
This franchise-like model is compelling to investors backing peer-to-peer players, said Shaheen, especially as they look to a future filled with shared, autonomous vehicles. A dispersed fleet of vehicles for rent could be a huge advantage over the more centralized model of traditional rental cars. If all kinds of vehicles can drive themselves to pick up passengers, the difference to consumers between ride-hailing services, rental cars, and car-sharing vehicles may matter less.
If these mobility business models start to blur together–as Shaheen’s research essentially predicts they will–Turo’s platform could really take off. “You can imagine how far a passenger can travel if they know there are hosts who have five automated cars they can rent when they get there,” she said. That longer-term pay-off may be what Enterprise and ACRA are keying in on as they lob legislative attacks.
Elements That Help Turo Change Car Sharing Industry
Different from Other Tradition Car Sharing Services
According to Turo, their services is the place where local hosts provide the one who need with the perfect vehicle for their next adventure. This car sharing marketplace help guests to book any car they want, wherever they want it, from a vibrant community of local hosts across the US, Canada, and the UK. Guests choose from a totally unique selection of nearby cars, while hosts earn extra money to offset the costs of car ownership.
A pioneer of the sharing economy and travel industry, Turo is a safe, supportive community over 10 million strong with more than 350,000 vehicles listed and over 850 unique makes and models. Whether it’s a truck to help out on moving day, a Mercedes-Benz for a luxurious weekend away, or a classic VW bus for a picture-perfect road trip, Turo lets you book cars that are part of a story, not a fleet. Turo is different than a traditional rental car company. For one thing, you are not “renting” from a company, you’re “booking” a car with a real person. Turo offers car owners, whom it calls “hosts,” a way to earn money sharing their vehicles with renters, or “guests,” who benefit from Turo’s broad selection of vehicles and potential savings compared with traditional car rental agencies.
Those rental companies – represented by the American Car Rental Association – say that car-sharing companies such as Turo are clearly car-rental companies. The only difference between Turo and Enterprise, officials say, is that Enterprise complies with state and federal laws governing rental car companies, while Turo has so far avoided them.
Getting People Comfortable with The Concept
Users can search for their desired car on the Turo website or app, and book directly from there. When the traveler arrives, they can choose how to pick their car: the owner delivers the car to a custom location designated by the traveler, owner delivers to an airport or traveler picks up the car directly at the owner’s location.
As might be expected of an emerging service platform competing against established, deep-pocketed corporations, marketing is a crucial component of Turo’s business strategy. Marketing also presents a multifaceted challenge for Turo, as the company needs to appeal not only to consumers interested in the temporary use of a vehicle, but also to car owners, who must be convinced to put their property into the hands of strangers.
“For the hosts, the challenge is really getting people comfortable with the concept,” Andrew Mok, chief marketing officer at Turo, told CO–. “People have been sharing their homes and renting out vacation homes – that’s been around for a very long time – but this idea of giving your car keys to a stranger is completely new. We’re inventing this paradigm from scratch.”
Much of the company’s efforts to convince car owners to share their vehicles revolves around the potential financial benefits, which can be enough to cover a monthly car payment. Mok said the average car owner on the Turo platform generates a little more than $600 per month for about 10 to 11 days of sharing.
Great Cancellation Policy
Turo has an insurance policy that covers damages and roadside assistance 24/7, but unlike regular rideshare insurance policies, this coverage is more for the benefit of the owner, who can be out a tidy sum of money if anything happens to their vehicle. They also include liability insurance to protect the car owner in case injuries were to result from a crash or other incident.
Choose wisely when you are presented with the option of what level of coverage you want to pay for, and fully understand what your personal auto policy does and does not cover.
According to Turo’s website, Turo offers three levels of insurance for renters:
- Premium – 40% of the trip price
- Basic – 15%-25% of the trip price (15% for trip prices exceeding $250)
- Decline – 0% of the trip price
Sometimes owners provide their own auto insurance policies for drivers, which fall under the label of “commercial rental coverage.” The cost for these varies by owner and vehicle, and it is paid for outside of the Turo marketplace.
“I’d say when people describe my company as the Airbnb of cars is about right” – said CEO Turo. “Selection, price, and convenience I think are the reasons why we think fundamentally we are better than traditional rental car. Our core mission is to enable people to monetize their cars. We’ve obviously run into the antagonism and the hostility from the rental car industry because they’re not used to seeing competition.” Like Airbnb, Turo is the dominant player in its peer-to-peer market.
Enterprise, which has the world’s largest rental car fleet, calls this argument a red herring because companies, whatever industry they are in, typically do not pay sales tax on equipment they purchase for commercial purposes, including rentals. Enterprise says peer-to-peer operators hope to avoid applicable taxes, plain and simple. Turo’s response: What we hope to avoid is having a competitor dictate how we should be regulated and taxed.
“We don’t have the same kind of scale that Airbnb has, but we have some car enthusiasts, like myself, who have found Turo to be a great opportunity to be able to get another car, a third car or fourth car, because the reality is, when you bring these cars and list them on the app, they can generate a lot of earnings. So, it is still a small percentage of our community that is going out and getting a second or a third or fourth car. Turo acknowledge that some entrepreneurial hosts have embraced the economic opportunity the marketplace provides.
Turo vs. Traditional Car Rental Company
What makes Turo better than the likes of Hertz, Avis, or Enterprise Rent-A-Car? And why Giants Rental are not happy with Turo? These blow are the advantages of Turo over them!
#1 Turo Can Deliver Customer’s Car
One of the worst parts of car rental is having to pick the car up. You must have someone drive you there (or drive yourself and pay to park your car). If you are traveling, you must ride the obnoxious airport shuttle and tote your luggage with you. This is not just annoying; it can also waste valuable time, especially if you are on a business trip and need to meet clients or head to a conference as soon as you arrive in town.
Turo solves this problem. Many car owners will deliver your car to your airport, hotel, or other location of your choosing. This is not available with every rental, but you can easily sort rentals by this feature within the Turo app. There is usually a fee to deliver the car, but it is minimal in comparison to the time and frustration it will save you.
Even if you do not want to have Turo deliver your car, the pick-up process is still much easier than going to a car rental office. You can meet the owner at their home and get the car directly. No lines or paperwork are necessary.
#2 The Turo App Makes Everything Easy
The Turo app makes the whole process of renting a car much easier. Instead of having to skip through dozens of menus and deal with pop-ups the entire time, you can quickly filter down to the car you want based on whatever matters most to you.
Once you have found the car you want, payment is a snap. All you must do is enter your payment details and driver’s license information. From there, you can request to rent the car. You will hear back from the owner shortly with information on how to get the vehicle.
You can also communicate with the vehicle owner within the app if you have any questions, and you can use the app to contact Turo support if you run into problems during your rental
#3 Customer Can Get Much Cooler Cars
Many car renters are just looking for the best price, and Turo certainly provides competitive prices. However, some people are looking to rent a car precisely because car rental provides them access to vehicles they could never afford to own. Turo can fulfill this wish.
They allow owners to rent out luxury, classic, and exotic cars. If you have ever wondered what it is like to drive a Tesla, then you can find out with Turo. Want to impress a client by picking them up in a Tesla or Mercedes-Benz? No problem.
This access to unique makes is not something that only Turo provides, but Turo does make it a lot easier than the other specialty companies you would have to go through to get these cars. Of course, you should know that higher-end cars come not just with higher rental prices but often with high security deposits or minimum renter age requirements. These are no different than other car rental companies, however, so do not let them deter you.
#4 Customer Can Easily Rent Trucks or Other Specialty Vehicles
Some people want to rent luxury or sports cars, but other people just need a truck they can use for a day to move some furniture. Turo can fill this need as well. It is not just trucks, either. You can rent vans, SUVs, AWD vehicles, or whatever you need to do something that your regular car cannot. There are other ways to rent these types of vehicles, but the process is more time-consuming (not to mention the cost is likely higher).
It is a good idea to be transparent with the vehicle owner about what you plan to use the vehicle to do. If you are going to be driving off-road, let them know. Some owners may have no problem with this if that is what their vehicle is designed to do, but others may have reservations. It is better to ask before renting than to have to pay lots of damage fees.
The Bottom Line
Turo is worth considering as an alternative to traditional rental car companies. Their service is widely available across multiple countries, offering customers access to unique vehicles that they couldn’t secure through a traditional car rental agency, all for a fraction of the cost.
Turo’s target customers is not only the one who rents car, but also the on who own a car and are looking to make some money on the side. The company has excellent insurance coverage and customer support, helping to protect their customers when renting out their vehicle. Turo is the sharing economy’s answer to big car rental agencies.
