Peer-to-peer car rental start-up Turo heads to Ger­many

Jamaica Gleaner - - AUTO MOTIVES -

PEER-TO-PEER CAR rental site Turo an­nounced a US$92-mil­lion fund­ing round led by Daim­ler that also will see the tech com­pany take over the au­tomaker’s Ger­man peer-to-peer com­pany Croove.

The Se­ries D round brings Turo’s to­tal fund­ing to US$193 mil­lion, and in­cludes new in­vestors such as South Korean con­glom­er­ate SK and Lib­erty Mu­tual Strate­gic Ven­tures as well as ex­ist­ing in­vestors such as Kleiner Perkins, GV and Shasta Ven­tures.

Turo’s Croove deal gives the tech start-up a foothold in Europe, where car and gas prices are high. Com­pany of­fi­cials also said new in­vestor SK will look to pave the way for a pos­si­ble Turo ex­pan­sion into Asia.

Founded in 2009, Turo now has 170,000 pri­vately owned cars on its site (in ev­ery state but New York due to group-cov­er­age in­sur­ance laws) and around four mil­lion mem­bers. Com­pared to 2015, that rep­re­sents a tripling of cars and a qua­dru­pling of mem­bers.

“We want more and more peo­ple to re­alise that they have at their dis­posal a plat­form that can change the eco­nomics of car own­er­ship,” Turo CEO An­dre Had­dad said. “With 1.1 bil­lion cars in the world, we’re just scratch­ing the sur­face.”

Daim­ler’s head of mo­bil­ity ser­vices Jorg Lam­parter said the in­vest­ment in Turo “just strength­ens the S in CASE”, the au­tomaker’s strat­egy to lead the way on con­nected, au­ton­o­mous, shared and elec­tric cars.

“Last quar­ter, Mercedes-Benz cars achieved the high­est half-year unit sales in the com­pany’s his­tory (1.1 mil­lion, up 13 per cent year over year),” said Lam­parter. “At the same time, the world of mo­bil­ity is chang­ing, peo­ple want ac­cess any­where and at any time.”

Turo’s raise comes as au­tomak­ers in­creas­ingly are try­ing to hedge against the shift to­wards ride­hail­ing and ride-shar­ing and away from car own­er­ship, which ac­cord­ing to AAA costs an aver­age of US$9,000 a year for an as­set used less than 10 per cent of the time.

Ford bought San Fran­cisco-based shut­tle van start-up Char­iot, Gen­eral Mo­tors has dropped US$500 mil­lion into Uber ri­val Lyft, and BMW has in­vested in car-pool app Scoop. But by in­vest­ing in Turo, Daim­ler at least is hitch­ing its wagon to a com­pany that has car own­er­ship at its core. In fact, Turo is be­ing pitched as a way to de­fray car own­er­ship costs or even af­ford a more ex­pen­sive car than your bud­get al­lows.

Turo statis­tics show that the owner of a new Honda Civic can cover a US$283 month fi­nance pay­ment with 11 days of rent­ing, while new Tesla Model S own­ers can cover their US$1,020 pay­ments in seven days.

Turo lis­ters need to present a car in good con­di­tion and can opt be­tween hav­ing the car picked up or of­fer­ing de­liv­ery. Turo renters must re­turn ve­hi­cles in as-found con­di­tion and full of gas. Cer­tain fees may ap­ply if the ve­hi­cle is deemed to need clean­ing or is late.

Turo CEO Had­dad said that un­like rental car com­pa­nies, Turo of­fers a range of spe­cial­ity and even ex­otic ve­hi­cles. “You have more free­dom of choice,” he said, adding that Turo al­go­th­ims and in­sur­ance data help en­sure that both renters and rentees are happy with their ex­pe­ri­ence.

Among those less than thrilled with the boom in ride-hail­ing and -shar­ing are car rental giants such as Avis and Hertz, not to men­tion taxi fleets.

Last quar­ter, Uber and Lyft both in­creased their share of the busi­ness trans­porta­tion mar­ket by two per­cent­age points, ac­cord­ing to Cer­tify, which culls credit car re­ceipts from ex­pense re­ports. Over the same pe­riod, car rental com­pa­nies saw their share of the mar­ket drop two per­cent­age points to 29 per cent, while taxis dropped two points to eight per cent.

Turo’s model has en­cour­aged other play­ers in the pri­vate car-rental space. Re­cently, clas­sic car in­sur­ance com­pany Hagerty also got into the same car rental game with its pur­chase of Clas­sics & Ex­otics, which it has re­named Drive Share.

“Peo­ple are talk­ing about the end of driv­ing and all that,” said Had­dad. “But we beg to dif­fer.”

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