Turo is the world’s largest car-sharing marketplace where users can book cars from a community of private owners across the US, UK, Canada, and Australia.
Founded by Shelby Clark, Turo started life as RelayRides in 2009 and was later taken over in 2011 by Lebanese-born entrepreneur Andre Haddad – a former Senior VP of Products at eBay.
The company’s mission is simple: to make better use of the world’s over one billion cars.
What is Turo’s business model?
Turo operates under the same “share-and-charge” model as Airbnb. The only difference is that users rent their vehicles out to make money instead of accommodation.
Like Airbnb, however, Turo is part of the broader peer-to-peer economy since it is a platform that connects buyer demand with seller supply.
Since Turo connects buyers with sellers who want to share their vehicles, the platform is also considered part of the sharing economy.
Understanding Turo’s business model
Turo’s business model is underpinned by four characteristics.
Turo acts as an intermediary between car owners and renters. It provides a platform for them to connect and conduct transactions.
While the company accepts almost any make or model of car, there are certain restrictions. In Australia, for example, Turo only accepts vehicles that are under 10 years old and have less than 200,000km on the odometer.
Turo earns revenue by charging a commission on each rental transaction that takes place on its platform.
The exact commission rate is dynamic and relies on the rental price, vehicle type, vehicle value, lead time, risk level, trip duration, and a host of other factors.
In the United States, Turo collects a minimum $15 fee from each trip.
But the company acknowledges that fees can be anywhere between 2.5% and 100% of the total rental charge. Turo also charges an extra fee for drivers under a certain age (excluding Canada).
Turo provides insurance coverage to both car owners and renters to mitigate the risks involved in renting out personal vehicles.
The company also has various safety and security measures in place to protect the interests of both parties.
Insurance is available across three different plans with varying levels of coverage:
- Premier – 65% to 100% of the trip price with third-party liability insurance covering up to $750,000 in the United States.
- Standard – 40% of the trip price with the minimum amount of third-party coverage required by the state where the vehicle is registered.
- Minimum – 15% of the trip price if it exceeds $250, or 25% if it does not exceed $250. Third-party coverage is the same as the Standard plan.
Turo offers 24/7 customer support to both car owners and renters, including assistance with booking, payment, and any other issues that may arise during the rental process.
For consumer peace of mind, Turo also offers roadside assistance in the event of accidents and breakdowns.
Turo’s distribution strategy revolves around connecting car owners with renters through its online platform. It enables individuals who have vehicles to offer them for rent to potential renters. This peer-to-peer model allows for a wide distribution of vehicles across various locations in countries like the US, UK, Canada, and Australia.
- Online Platform: Turo provides a user-friendly online platform and mobile app where car owners can list their vehicles, and renters can browse and book them. This platform serves as the primary distribution channel.
- Vehicle Listings: Car owners list their vehicles with details such as availability, location, rental price, and vehicle specifications. This extensive listing database ensures a broad selection of vehicles for potential renters.
- Location-Based: Turo’s platform operates across multiple countries and cities, allowing for a geographically diverse distribution of vehicles. Users can find available cars in their desired locations.
Turo’s marketing strategy is designed to attract both car owners looking to list their vehicles and renters seeking transportation solutions. The company leverages various marketing tactics to achieve this:
- Digital Marketing: Turo maintains a strong online presence through its website and mobile app. It uses digital advertising, search engine optimization (SEO), and social media marketing to reach its target audience.
- User Referral Program: Turo encourages its existing users to refer friends and family to the platform, offering incentives or discounts for successful referrals. This word-of-mouth marketing helps grow its user base.
- Promotions and Discounts: Turo runs promotional campaigns and offers discounts to incentivize both car owners and renters. This can include discounted rental rates or bonus earnings for car owners.
- Partnerships: Turo forms partnerships and collaborations with other businesses or travel-related platforms to expand its reach and promote its services to a broader audience.
- Customer Reviews: Positive reviews and testimonials from satisfied users play a crucial role in building trust and attracting new users. Turo encourages users to share their experiences and feedback.
Turo’s organizational structure typically includes key functions and roles:
- Executive Leadership: Turo is led by its CEO and executive team, responsible for setting the company’s strategic direction and overseeing its operations.
- Business Development and Partnerships: This team focuses on forming partnerships with car rental agencies, travel companies, and other stakeholders to expand Turo’s reach and offerings.
- Marketing and Growth: The marketing department handles user acquisition, digital marketing, promotions, and referral programs to drive growth.
- Product Development and Technology: This team is responsible for the platform’s development, ensuring it remains user-friendly and up-to-date.
- Customer Support: Turo provides customer support to assist users with inquiries, bookings, and issue resolution.
- Legal and Compliance: Ensures Turo complies with relevant laws and regulations, including insurance and liability matters.
- Operations: Manages day-to-day operations, including verifying vehicle listings, handling transactions, and ensuring a smooth rental process.
- Finance and Accounting: Responsible for financial planning, revenue management, and accounting.
- Turo is the world’s largest car-sharing marketplace where users can book cars from a community of private owners across the US, UK, Canada, and Australia. Turo started life as RelayRides in 2009 and was later taken over by Lebanese-born entrepreneur Andre Haddad.
- Turo is part of the peer-to-peer economy as it connects buyer demand with seller supply. Since Turo connects buyers with sellers who want to share vehicular resources, the platform is also considered part of the sharing economy.
- The four pillars of Turo’s business model include facilitation, revenue generation, risk management, and customer support.
Key Highlights of Turo’s Business Model:
- Introduction to Turo:
- Turo is the world’s largest car-sharing marketplace, allowing users to rent cars from a community of private owners in countries like the US, UK, Canada, and Australia.
- It was founded by Shelby Clark in 2009 as RelayRides and later taken over by entrepreneur Andre Haddad in 2011.
- Mission and Business Model:
- Peer-to-Peer Economy and Sharing Economy:
- Turo operates within the peer-to-peer economy, connecting vehicle owners with renters.
- Its role in connecting those who want to share vehicular resources places it within the sharing economy.
- Four Pillars of Turo’s Business Model:
- Revenue Generation:
- Turo generates revenue by charging a commission on each rental transaction.
- The commission rate is dynamic and factors in elements like rental price, vehicle type, value, risk level, and trip duration.
- In the US, Turo collects a minimum $15 fee per trip, with fees ranging from 2.5% to 100% of the rental charge.
- Risk Management:
- Turo provides insurance coverage to both car owners and renters to mitigate rental-related risks.
- Insurance plans vary in coverage, including third-party liability insurance, based on the level of insurance chosen by the car owner.
- Customer Support:
- Turo offers round-the-clock customer support to address booking, payment, and other rental-related inquiries.
- Roadside assistance is available in cases of accidents or breakdowns, ensuring consumer peace of mind.
|Value Proposition||Turo offers a compelling value proposition for its users, including: – Car Sharing: Providing access to a wide range of vehicles for rent from local hosts. – Variety and Choice: Offering a diverse selection of cars, from economy to luxury. – Convenience: Enabling users to find and book cars in their local area. – Affordability: Offering competitive rental rates compared to traditional car rental companies. – Peer-to-Peer Interaction: Facilitating interactions between car owners (hosts) and renters. – Insurance Coverage: Providing insurance options for both hosts and renters. – Flexibility: Allowing users to choose the duration and location of rentals. – Income Generation: Allowing car owners to earn income by renting out their vehicles.|
|Core Products/Services||Turo’s core products and services encompass: – Car Rentals: Facilitating the rental of vehicles from individual car owners. – Host Services: Enabling car owners to list and manage their vehicles on the platform. – Insurance Solutions: Providing insurance coverage options for hosts and renters. – Mobile App and Website: Offering user-friendly platforms for browsing and booking cars. – Customer Support: Providing assistance and support to users throughout the rental process. – Turo Go: Allowing renters to unlock and start their rentals with a mobile app. – Trip Extras: Offering additional services like car delivery and post-trip cleaning. – Rental Reviews and Ratings: Featuring user-generated reviews and ratings for transparency.|
|Customer Segments||Turo serves a diverse range of customer segments, including: – Travelers: Providing transportation options for tourists and business travelers. – Local Residents: Offering an alternative to car ownership for everyday use. – Car Owners: Allowing individuals to earn income by renting out their cars. – Car Enthusiasts: Catering to those interested in experiencing different vehicles. – Budget Travelers: Attracting users seeking cost-effective transportation solutions. – Event-Goers: Serving individuals attending special events or occasions. – Insurance Seekers: Providing insurance options for hosts and renters. – Global Reach: Extending services to customers worldwide.|
|Revenue Streams||Turo generates revenue through various revenue streams: – Service Fees: Earnings from fees charged to renters for using the platform. – Host Fees: Income generated from fees charged to car owners for listing their vehicles. – Insurance Sales: Revenue from selling insurance coverage to hosts and renters. – Turo Go: Earnings from the Turo Go service, which allows for remote vehicle access. – Trip Extras: Income from offering additional services like car delivery and cleaning. – Listing Upgrades: Revenue from hosts who opt for premium listing features. – Referral Programs: Earnings from referral programs that encourage user growth. – Global Expansion: Potential income from expanding into new markets and regions.|
|Distribution Strategy||Turo employs a strategic distribution strategy to reach users: – Online Platform: Offering a user-friendly website and mobile app for bookings. – Mobile App: Providing a convenient mobile app for on-the-go bookings. – Search and Discovery: Implementing search and discovery features for users to find cars. – User Reviews: Incorporating user-generated reviews and ratings for trustworthiness. – Host Network: Building a network of car owners (hosts) in various locations. – Insurance Partnerships: Collaborating with insurance providers for coverage options. – Marketing and Advertising: Promoting the platform through marketing campaigns and advertising. – Global Expansion: Expanding into new cities and countries to reach a wider audience.|