Overview
Turo is a new peer-to-peer car-sharing platform having its business strategy tied to its insurance provider. Automobile owners may hire out their cars through a website browser and smartphone app. In addition, clients may choose from over 850 distinguished models and schedule a period to pick up the vehicle. The company has a sizable user base in the United States, Canada, and the United Kingdom, with over 14 million members in 5,500 cities.
For example, if users want to commute by hiring a car from point A to point B or test drive a vehicle model they are interested in purchasing at a low custom, they have to pay the car owner for the service. Meanwhile, both hosts and renters have to have insurance in order to utilize the platform. Therefore, insurance fees are a big part of the company’s income strategy.
Company Profile
| Company Name | Turo, Inc. |
| Website | https://turo.com/ |
| Founded | June, 2010 |
| Founders | Shelby Clark |
| Key People | Andre Hadad – Chief Executive Officer, Alex Benn – President, Lorie Boyd – Chief People Officer, Michelle Fang – Chief Legal Officer, Chuck Fisher – Chief Financial Officer, Avinash Gangadharan – Chief Technology Officer, Andrew Mok – Chief Marketing Officer, Tom Wang – Chief Product Officer, Brian Beaver, Albert Mangahas, Jennifer Schultz, Julie Weingardt – Senior Vice President & Louis Bertuca, Xavier Collins, Ali Keegan, Brent Loder, Cedric Mathieu, Jeff Platt, Roy Schaham, Francisco Silva, Steve Webb & Vice President |
| Headquarter | San Francisco, United States |
| Company Revenue | $330.5 million as of 2020 |
| Key Competitors | Expedia, Avail, Hyrecar, Silvercar, Avis Budget Group, Getaround, Fox Rent A Car |
What is Turo? A Brief History
Turo is best known as the “Airbnb of cars.” It is possible to hire a vehicle directly from a person rather than through a large company with the platform. Therefore, this tech company enables customers to hire a variety of vehicles on the platform, including Teslas, pick-up trucks, Jeep, and other luxury cars. At the same time, it also helps hosts to earn a wonderful side hustle while compensating for the expense of their automobile payments.
Shelby Clark launched RelayRides (currently Turo) in 2010 with the support of his Harvard Business School classmates Nabeel Al-Kady and Tara Reeves. The company only offered its service in San Francisco, CA, where it was headquartered. Then, it expanded to Boston and other states later on. Moreover, RelayRides rebranded as Turo in 2015, emphasizing long-term rentals. The company spread out its service to Canada in the following year.
How Does Turo Work and What Does It Offer 2022?
So how exactly does Turo work?
Users must fill in the information to verify their identity with Google, Email, or Facebook. Once the identity is connected, the users can browse through thousands of vehicles across the location on the app. Users can also hire a vehicle that is available for both short-term rentals and longer-term rentals. After deciding, they can pick up their desired and luxurious models of car. After the owner accepts the request, the renter could choose from three options to start driving and return it with a guarantee of a full tank of gas and the same conditions.
Moreover, a vehicle is accessible at over 300 US airports on the app, so renters can arrange to see the owner in person to get the selected car. The car can be brought to the renter within a set distance by communicating with the owner. In another way, the car owners can hire a delivery person to do it for them. To guarantee any potential damages during the service, the platform provides financial support that is backed by a $1 million insurance policy to the hosts.
What does Turo offer to its consumers?
Choose Your Preferred Vehicle from Many Models: Customers are required to choose their preferred automobile type and year, as well as the duration of the rental. Simultaneously, they can pick and drop off the car where they want.
Delivery Filters: The app is quite comfortable because the renters can choose the option to deliver the vehicle or pick up by themselves on the filter.
Hire Cars at 56 Different Countries and over 5,000 Cities: The app allows users to rent cars in up to 56 countries and over 5,000 cities. The model of vehicles vary depending on certain locations that are offered.
Direct Contact To Hosts By App: If you cannot find your vehicle on the app, you may call the host to find it. With this smart feature, the app has gained a lot of trust and confidence from the user’s experience.
Turo Business Model 2022
The company’s business plan are identified in 8 aspects as seen below:
Customer Segmentation: It is to outline how value is produced for automobile owners and passengers because Turo values both the hosts and renters the most
Value Proposition: the amenities are designed to give the hosts and the renters security and trustworthiness, ensuring longevity of the operation
Channeling: an online booking is a way of bridging the vehicle owners and customers to deliver the service
Relationship With The Customers: it is the company’s goal to keep customers safe; therefore, they are obligated to pay right after registering
Revenue Stream: the customers will experience cheaper and more flexible renting rates than regular car renting
Prolific Resources: the company has recruited and produced talent teams across the United States, having over 2000 cities and 300 airports
Main Partnership: this tech firm has no other partners more important than the vehicle owners as they are the main root for the company’s growth
Insurance Coverage: every car owner is safeguarded by a $1 million insurance policy, covering unforeseen damages occurring during the service.
Turo Unique Selling Propositions 2022
Pricing Factor: Using the app is completely free of charge, so users can download the app and use it straight away. In addition, pricing is negotiable because the users are allowed to contact the vehicle owners directly.
Promotional Video and Guides to Renting Vehicles on App: the app offers free video tutorials for both hosts and renters; therefore, they can watch and learn all the app features for free. On top of that, the app features various car models that the users can choose from. The users can decide to rent the car at a lower rate and ease with the preferred vehicle.
Free Cancellation: the customers are open to cancel the order anytime. In addition, the app does not charge a single penny if the customer cancels the trip 24 hours before.
Insurance Policy: one of the main reasons people like to use the company’s service is the $1 million insurance policy. This policy builds both hosts and customers’ trust, security, and confidence during the services. Moreover, the company also has a very responsive and helpful
customer support team in case of emergencies.
How Does Turo Make Money 2022?
Turo makes money by helping vehicle owners to make money as well. This ecosystem ties a strong bond for every vehicle owner. It is simply because the car owners can earn money if only they use the platform and vice versa. Therefore, the company earns up to 40% commission fee from the total trip price of the vehicle owners. However, it varies based on how the hosts pick up the protection plan as well. For example, one vehicle owner selects a 40% fee insurance plan and earns a lump sum of $600 per month. In this scenario, the company providing the service will make 40% of $600 per month as well. As a result, the company can earn 240$ while the car owners take home the remaining 360$.
Turo SWOT Analysis 2022
Strengths
- The most promising and profitable side hustle platform
- Hosts have high flexibility because they can block calendars prior to their busy schedules
- The app is easily accessible by hosts and users
- Guarantee a high occupancy rate
- Hosts are not required to put the car on a station if there is no one renting it
- High security protected by the company’s insurance policies
- Pick-ups and drop-offs features are user-friendly for hosts
- Guarantee a fairly good income stream if the hosts are responsive and friendly
- The platform offers a list of maintenance conditions before hosts can rent out
- There is a list of different types of cars provided so that tenants can choose the preferable one
Weaknesses
- The commission fee charged from the hosts is extremely high and keeps increasing from year to year
- Complicated insurance options that are not convenient for hosts
- Users are more valuable than the hosts; therefore, it is hugely disappointed to complain against the customers
- Renting vehicles by using this platform from other locations is not profit-making
- This type of side hustle is not passive as the hosts are required to actively respond to customers, consistently look after the vehicles and involve in any problems that occurred
- Wear and tear of the interior are not included in the insurance plan
Threats
- Renting vehicles on the platform requires a lot of understanding regarding policies and financial wise, especially the insurance policy and depreciation
- Claiming insurance for any damage done by the customers will be challenging
- Handling complaints or other serious cases from the company takes a lot of time to respond
- Renting vehicles are highly risky as they can be stolen or crashed
- Hosts must be cautious to capture every moment before and after any problems.
Opportunities
- Broaden to more lucrative locations and countries
- Hosts can make money while they are not using their car
- The platform helps improve the host’s financial knowledge, especially by calculating depreciation before renting the vehicle out
- Commission fees reduction should be taken place to cut down on the host’s financial burden
- Insurance policies should be simplified