Turo is a peer-to-peer internet marketplace that enables users to rent or borrow a vehicle from others. The platform sometimes likened to Airbnb, is as straightforward to use. To book, you enter a date and place. In addition, users can refine their search by selecting a particular car brand, model, and category. After entering the specifications, you will be given a choice of cars from which to choose. You can complete the entire booking procedure on the site. Finally, you will collect The vehicle from a predetermined place or, if the owner agrees, deliver it to a predetermined destination. Turo’s numerous insurances safeguard both the automobile owner and the renter. Turo provides support and roadside assistance 24 hours a day, seven days a week.
Shelby Clark launched Turo as RelayRides in 2010 with the assistance of her classmates Nabeel Al-Kady and Tara Reeves. RelayRides expanded its national service in 2012 from its headquarters in San Francisco, California.
Wheelz, a former vehicle-sharing competitor, was acquired by RelayRides in 2013. And expanded its inventory and allowed them to take advantage of the feature that allowed consumers to unlock cars without meeting the owner. In the same year, the New York State Department of Financial Services fined and ordered RelayRides to suspend operations for misrepresenting insurance coverage for its users. New York is the only state where these services are currently unavailable.
In 2015, RelayRides relaunched as Turo, emphasizing its long-term rental availability. The company announced plans to expand its services into Canada in 2016. Agencies can retain the vast bulk of profits by offering their commercial auto insurance. Additionally, their platform is available to independent automobile rental firms.
Before 2014, Google Ventures, Shasta Ventures, Canaan Partners, August Capital, and Trinity Ventures contributed $52.5 million to RelayRides. In 2015, they got further funding of $47 million from the venture capital firm Kleiner Perkins Caufield & Byers. By connecting drivers and renters through its iOS and Android applications in over 4,500 cities, it offers rental cars at an average discount of 35% compared to conventional rental car agencies.
Understanding The Business Model Of Turo
The business model of Turo is an online marketplace for autos. It brings together automobile owners and individuals seeking temporary vehicle rental. Turo ensures that each city it serves has access to quality car models. The more significant number of vehicles is advantageous to customers because they can purchase a car of their choice at an affordable price.
Turo must be appealing enough to automobile owners to be convinced to rent their vehicles on the platform. In addition to allowing car owners to earn money, the company gives guidance on how to maximize their rental program. Turo has enabled numerous hosts to establish their businesses on the platform. It allows them to rent out multiple automobiles and create substantial revenue.
Turo provides appropriate insurance options to make the platform safer and more reliable for car owners. It ensures that the drivers utilizing your car are competent. It includes both client and host injuries. In addition, the company conducts a background check on customers before allowing them to rent vehicles. However, there is a problem with Turo. Many individuals use Turo vehicles for unlawful purposes. There have been countless past instances where some customers have used cars for drug smuggling, human trafficking, and other illegal activities.
Turo is well-equipped to become the leading automobile rental company despite its difficulties. As long as car owners have faith in Turo, the company can continue to expand its services and enter new markets. The best aspect of Turo is that it provides vehicles at affordable prices.
Turo generates revenue through a variety of fees applied in various circumstances:
- Trip fees – these are calculated as a percentage of the overall trip cost and are affected by vehicle value, trip duration, and how far in advance the trip is reserved.
- Young driver fees — Drivers aged 18-25 in the United States and 18-24 in the United Kingdom are charged a young driver fee.
- Cancellation costs – applied to owners who do not show up for a planned stay or break cleaning regulations
- Miscellaneous fees – other instances in which payments are collected include profiteering, maintenance policy violations, and misrepresentation of vehicles.
- Additional distance fees, EV recharging fees, petrol replacement convenience fees, and pet policy breaches are guest-specific fees.
In What Way Can You Make Money In Turo?
Turo dynamically determines your vehicle’s rental price depending on several parameters when you offer it on the site. It covers the vehicle’s market worth, time of year, location, and other aspects to maximize your listing’s revenue. Alternatively, you can manually set your car’s daily rental rate. Suppose your car has a market value of approximately $20,000, and you are ready to rent it for ten days each month. According to this Turo calculator, you might earn over $4,500 a year! Your earnings are deposited by direct transfer within five days after the trip’s conclusion. Depending on the vehicle protection package, you can earn between 65% and 85% of the trip price or 90% if you have commercial rental insurance and waive Turo’s protection.
Does It Pay To Work As A Turo Host?
Yes, it is worthwhile to work as a Turo host. You will achieve success if you exert effort and rent many vehicles. Turo is an excellent way to earn extra money. The best part is that Turo’s protection package will cover your vehicle, so you have nothing to worry about. Turo provides safer vehicle exchanges than other automobile rental platforms. Not only that, but it also pays for your ownership costs. But only if you choose an expensive rental price.
Revenue, Financing, And Valuation Of Turo
According to Crunchbase, Turo has recently raised over $502.6 million in funding. Among the significant investors in the company are Manhattan Venture Partners, Allen & Company, IAC, Daimler, Kleiner Perkins, and many others. In July 2019, Turo disclosed its valuation at its Series E financing, during which IAC contributed over $250 million. The valuation of the corporation was $1 billion. Turo’s revenue in 2020 was over $149.9 million. However, the company lost more than $97.1 million within the same period.
Even though Turo is the largest car-sharing marketplace in the world, it faces severe competition from the following companies:
Avis Budget Group operates Avis Zipcar, a membership-based car rental business. Long before Turo, the company created an in-car GPS monitoring device. Members must additionally pay an application fee of $25 and membership fees of $7 per month or $70 per year. Zipcar, unlike Turo, employs the one-way model. Renters can pick up and drop off automobiles at different locations, reducing additional mileage fees. This model incorporates the cost of gas and insurance in the total pricing. Renters can use Zipcar’s petrol card to refill the tank if it runs dry. The most fantastic option for Turo for short-term automobile rental is Zipcar.
2. Uber Rentals
Uber Rentals is a car rental service provided by Uber, the most popular ridesharing firm with over 100 million monthly users. Customers can reserve rental vehicles through the Uber app, accessible in 69 countries and over 900 cities worldwide. In contrast to Turo, Uber Rentals provides rentals through third-party automobile rental agencies such as Hertz, Avis, and Dollar. This strategy guarantees that consumers have access to various rental car alternatives, including premium vehicles, sedans, and SUVs. The service is not limited to Uber clients. It provides discounts on Uber rides to renters heading to pick up their cars. Customers must be at least 21 years old and possess a valid driver’s license to hire via Uber. Uber Rentals functions similarly to Turo, but being Uber’s automobile rental service, it has a considerable competitive edge.
3. Hertz Organization
Hertz maintains around 12,000 corporate and franchisee outlets throughout 160 countries. It owns Thrifty Car Rental, Firefly Car Rental, and Dollar Rent-A-Car, making it one of the world’s largest rental car firms. After declaring bankruptcy, the company concentrates on rebuilding to regain its prominent position in the automobile rental industry.
4. Lyft Rentals
Lyft Rentals is a car rental service provided by the ridesharing expert Lyft. Customers can rent vehicles using the Lyft website or mobile app. In 2021, the ride-hailing firm recorded its first-ever net income of $92.9 million, marking its first successful year. Lyft Rentals operates on a two-way basis, forcing clients to return rental automobiles to the area where they were picked up. The platform supports sedans, small cars, and sport utility vehicles. Customers can rent premium models with complimentary accessories that enhance the rental experience. Lyft Rentals is comparable to Turo in numerous aspects. This service is one of the most excellent alternatives to Turo for short-term automobile rentals.
5. GIG Car Share
AAA operates the membership-free GIG Car Share car-sharing service. Only San Francisco Bay Area, Seattle, and Sacramento have access to the service. GIG Car Share offers a fleet of more than one thousand hybrid and electric automobiles, including the Toyota Prius Hybrid and Chevrolet Bolt. GIG Car Share is a competitive alternative to Turo in San Francisco, Seattle, and Sacramento. In contrast to Turo, GIG’s strategy allows renters to return the vehicle to any area inside the HomeZone rather than the exact pick-up location. This model minimizes the cost of mileage and saves time. The AutoTech Breakthrough Awards honored GIG Car Share Car Sharing Service of the Year in October 2021.
6. eGo CarShare
eGo CarShare is a non-profit corporation in Colorado that provides car-sharing services. It is among the most popular services in over six cities, including Denver and Boulder. In 2021, eGo CarShare offered more than fifty vehicle models for rent through its app and website. eGo CarShare was one of the first car-sharing businesses to provide electric vehicles, giving it an ideal alternative to Turo for environmentally minded customers. Renters can search for available cars in their neighborhood and reserve them for at least 15 minutes. The eGo CarShare software enables car owners to offer their vehicles, establish an hourly fee, and accept payments directly through the platform.
Getaround is an outstanding automobile rental service with over two hundred thousand subscribers in eight hundred cities worldwide. Customers can search for and reserve vehicles in their region via the Getaround website or mobile app. Getaround had over 6 million users in 2021. This financing transaction brought the company’s venture funding to $600 million. Getaround’s primary competitive advantage is its flexible and extensive listing, which includes eco-friendly vehicles. Like Turo, the Getaround app provides clients access to local rental cars. Car owners can hire their automobiles by the hour, day, week, or month through the site. Getaround launched a program in March 2021 to assist its clients in establishing car-sharing businesses. The company employs approximately 550 individuals.
What Factors Have Contributed To Turo’s Success?
Numerous value propositions have allowed Turo to gain a substantial customer base. The following are some factors that have contributed to the success of Turo:
1. Diverse Market Regions
A significant value proposition of Turo is that its services are accessible in all regions of the country. Turo’s services, for instance, reach market locations that traditional automobile rental firms cannot get or do not exist. Such marketplaces are found in rural areas, remote towns, and sparsely populated areas.
2. Reduced Inventory Shortage Risk
Standard automobile rental agencies are prone to fleet shortages at various times. They must also pay the fleet management revenue generated. However, Turo provides incentives for individuals to use the platform to rent out vehicles. This incentive offers Turo near-constant fleet availability without incurring purchase or maintenance costs.
3. Turo Roadside Assistance
All Turo customers have access to roadside assistance around-the-clock. If a breakdown or other vehicle-related problem occurs, clients can contact Turo, who will dispatch a complimentary service vehicle. This on-road assistance ensures the safety of platform users and makes Turo a reputable automobile rental company.
4. Insurance and Vehicle Protection Plans from Turo
Turo provides various insurance options for automobile owners (hosts) and customers (renters). These policies often cover automobile injuries for the host and third-party liability for guest drivers. Due to these insurance options, car owners feel comfortable listing their vehicles on the marketplace. In addition to roadside assistance, these insurance policies provide consumers with a dependable platform.
5. Data-Driven Marketing Strategies
Turo takes customer feedback seriously and monitors many KPIs to develop a comprehensive strategy for addressing industry challenges and directing marketing efforts appropriately.
6. Resilient Business Model
Turo’s P2P business concept was revolutionary at the time of its introduction. Despite being a challenging undertaking in 2010, Turo’s business plan helped the company to overcome various obstacles inherent in the traditional automobile rental business model. For example, Turo’s car rental business model removed stock management and vehicle delivery issues. In addition, the participation of user-owned inventory led to the creation of user-generated content, including product listings on the platform and social media word-of-mouth marketing.
Turo’s Pros and Cons
The Pros of Renting Out Your Car Through Turo
1. Lots of Bookings
If you reside in or near a large city or airport and utilize Turo, you’re in luck. If your vehicle is reasonably priced and has ample availability, it will be frequently reserved.
2. Easy-To-Use App And Website
Turo features a highly intuitive layout, making it simple to navigate the site for bookings, communications, amending listings, being paid, etc.
3. Excellent 24/7 phone support
Turo offers 24/7 phone help for common issues such as invoicing inquiries and late returns. No phone support is available for more serious issues, such as damage claims.
Disadvantages of Renting Your Car on Turo.
1. Absence of transparency
Many hosts have learned the hard way that Turo is not their partner, regardless of what they may claim. In terms of the advantages and disadvantages of Turo, this is at the top of the list.
When it comes to upholding their policies, they will always find a way to avoid paying a payment. And this is when it becomes perilous since you will not see this side of them until it is time for them to step up, which is too late.
2. Turo Charges A High Commission Fee
Over the years, Turo’s price structure has become increasingly lopsided in favor of the company, which means that the host is diminishing. Turo takes 15-40% of each reservation, depending on the protection level you choose. And the cost is 8.5% if you opt-out of their protection programs entirely and provide your own. Airbnb, in comparison, charges hosts a 3% commission fee.
3. Poor Customer Care
Turo offers solid phone service 24 hours a day, seven days a week, for minor issues like a late return or picks up. But don’t hang your breath if it’s anything more serious, such as a demand for damages or legal inquiries. You will be required to submit a “claims ticket” and await their response through email alone, with a longer turnaround time.
The Turo business model, in general, offers a convenient alternative to car ownership or rental for both drivers and passengers who need to go around but don’t want to deal with the trouble of doing so. It is also a terrific method for drivers to make additional money and a very convenient and speedy way for passengers to travel to their destinations.