TURO — the next Airbnb, but for your car
Cars cost their owners huge amounts of money even when they’re not being driven
Airbnb has been one of the more surprising successes of the internet age. Who knew you could make money by renting out extra rooms in your house?
Now, what other underused asset do many people have that they might be able to monetize? How about your car? Most people’s wheels sit in a garage or driveway all night, and in some parking lot most of the day. Maybe somebody needs a car just like yours while it is just sitting there, depreciating by the minute?
This idea occurred to Shelby Clark when he was a student at the Harvard Business School in Cambridge, Mass., in the late 2000s.
The “founding story” goes that he was in town one snowy winter evening, and while he normally would have walked or taken his bike, it was too cold.
He couldn’t find a Zipcar or a conventional rental agency that had a car available. But he noticed all the cars parked out on the street, going nowhere. That was his “Aha!” moment. He came up with an internetbased platform for cars that works very much like Airbnb, but actually predated it by a couple of years.
It was originally called “RelayRides.”
The company expanded rapidly, took on new management, and changed its name to TURO — a word they researched carefully to make sure it didn’t mean “cockroach” in some Bulgarian dialect. (Apparently, this investigation didn’t turn up the name of a similar-sounding town in Nova Scotia).
I spoke with TURO’s CEO, Andre Haddad, recently in the company’s Toronto office.
He previously worked at eBay, and understood perhaps better than most how internet-based businesses function.
Haddad points out there are some 30 million cars in Canada, 300 million in the U..S. and over 1.2 billion around the world. Virtually all of them, save perhaps airport limos, are massively underutilized.
These cars all cost their owners huge amounts of money even when they’re just sitting there: buy or lease payments, parking, maintenance and, of course, the biggest of them all, depreciation.
TURO gives its customers the chance to monetize this unused asset.
You register your car with TURO. They verify that the ownership is all in order, ensure the vehicle is in good mechanical condition and arrange liability and collision insurance.
The car then becomes available for “rent” on the company’s website.
They also vet anyone interested in renting a vehicle. You don’t want the cops to come looking for your vehicle, which they saw as the getaway car in the surveillance video of some bank robbery. How do the rates compare with conventional car rentals?
On TURO’s website, I found a 2016 Honda CR-V, one of about a dozen TURO cars available in my home town area, for $68 a day. I checked out a local carrental outfit, and they had a similar-sized SUV, a Nissan Qashqai, for $64 a day.
So, pretty similar, although the CR-V is a 2016 model; the Qashqai is, presumably, a 2019.
Now, the TURO website also shows a 2010 BMW M6 convertible for $223 per day. Sound expensive? Maybe. But according to the website, 20 people so far have not thought so, and the renter has achieved a “five-star” rating from previous clients. And I don’t see any BMW M6 convertibles on any rent-a-car company’s website.
Personally, I’m leery about lending my own cars to some of my closest friends.
Perhaps this stems from an ill-fated townhouse rental we ran some years back. Or maybe I just need new friends. Letting strangers drive my cars? Um, no.
My paranoia is fuelled by some issues the company has faced. TURO cars have been stolen. Some have been crashed. People have been hurt, or even died. According to a New York Times article, one New Jersey Jaguar owner had his car crashed three times, and totalled once, during some 29 TURO rentals.
Still, he was quoted in the story as saying he might put the car back in the TURO fleet, because, “I’m a businessman, and I want to leverage my assets and generate income from as many sources as possible.’’
Obviously, many people are OK with the concept, judging from the number of cars TURO has available across Canada, the U.S. and Europe.
“Last year,’’ Haddad says proudly, “we had some ten million users on our site worldwide, some 350,000 vehicles and over seven million dates booked.
“And we’re growing by 100 per cent annually for the past few years,” he adds, seeming almost surprised at the company’s growth.
He admits it sometimes takes a while for people to get comfortable with the idea.
“When we started in Canada in 2016, we had zero cars! But it soon snowballed,” he says, showing some facility for relevant metaphors.
In fact, Haddad has four of his own vehicles on the site in his home town of San Francisco — two Teslas, a Porsche 911 and an Audi R8. They have some 850 makes and models on the site, including some very expensive premium cars.
“These have actually become a significant part of the business,” Haddad says.
“Car enthusiasts who might lust after a car they could not otherwise afford can see what it’s like to drive one, maybe with the intent of a better test drive than a dealer would allow, or just for the thrill of driving the particular car.”
The converse is also true. By effectively having other people help pay for your car, you can drive a much nicer car than you could otherwise afford.
Also, many customers have told Haddad that their TURO income can help pay down debts such as student loans, mortgage payments or rent. He says the average TURO owner earns some $550 a month sharing their car for 12 days. The idea of car sharing is not new. Zipcar, Ford and Mercedes-Benz, among others, have tried it with varying degrees of success.
But as Haddad says, “We do not have any capital tied up in the vehicles.
“We’re a technology platform that does the hard work of connecting the host with the guest.
“We provide insurance, we screen the guests, we provide roadside assistance if necessary and, of course, we don’t have all the physical infrastructure of a conventional rental company — no cars, no garages, very little office space.”
One car you won’t find on TURO’s website is a 1977 AMC Hornet hatchback. At least, not mine. But if you need a car and don’t want the same-old, same-old boring beige sedan, it might just be worth a visit to www.turo .com.