Turo Business Model

  • Turo is a car-sharing app where users can book vehicles directly from their owners.
  • Like all online marketplaces that rely on adequate supply, the viability of Turo’s business model depends on its attractiveness to vehicle owners looking to make extra money. It provides them with seller support and increases trust by offering insurance and verification checks.
  • Turo makes money by taking a percentage of each booking and also collects fees that arise in specific circumstances.

Understanding Turo’s business model

Turo is a car-sharing app where users can book vehicles directly from their owners. 

Turo’s business model can be best described as an online marketplace that connects car owners with renters for a predetermined time period.

Like all online marketplaces that rely on adequate supply, the viability of Turo’s platform depends on its attractiveness to vehicle owners looking to make extra money.

To that end, the company tells owners how to optimize their ads and has even allowed some to run the multiple-vehicle businesses on the platform.

Turo also takes care of insurance to ensure both parties are sufficiently covered – a common point of frustration and confusion in the vehicle rental industry.

It also assesses a customer’s driving history to minimize instances where a claim needs to be made.

How does Turo add value?

Turo is the largest online car-sharing marketplace in the world and is available in over 7,500 cities across the United States, Canada, and the United Kingdom.

Aside from a presence in many major cities, some vehicles on the platform can be delivered for free to a customer’s location or the airport.

This widens the appeal of the service to both leisure and business-related activities.

Turo’s fees also tend to be lower than traditional providers like Hertz and Avis and some owners on the platform don’t mind lending their cars to renters aged under 25.

Speaking of owners, Turo provides a relatively painless way to monetize their vehicles.

They have the freedom to set their own prices, but the company also offers dynamic pricing based on the time of year, type of car, and location.

How does Turo make money?

Turo makes money via numerous fees that are applicable in various circumstances:

  • Trip fees – this is calculated as a percentage of the total trip cost and is influenced by vehicle value, trip duration, and how far the trip was booked in advance.
  • Young driver fees – for drivers in the US aged 18-25 and in the UK aged 18-24, a young driver fee applies.
  • Cancellation fees – these are charged to owners who fail to show for a booked trip or violate cleaning policies.
  • Miscellaneous fees – other examples where fees are collected include profiteering, maintenance policy violations, and vehicle misrepresentation.
  • Guest-specific fees – these include additional distance fees, EV recharging fees, gas replacement convenience fees, and pet policy violations.

Mobility-Related Business Models

BlaBlaCar Business Model

BlaBlaCar is a French online carpooling marketplace connecting drivers and passengers willing to share the cost of a journey. BlaBlaCar makes money by charging a service fee to its customers. The exact fee depends on the total amount the driver sets for the ride. The company also shares ride revenue with bus operators that adopt its branding in their fleet.

DoorDash Business Model

DoorDash is a platform business model that enables restaurants to set up at no cost delivery operations. At the same time, customers get their food at home and dashers (delivery people) earn some extra money. DoorDash makes money by markup prices through delivery fees, memberships, and advertising for restaurants on the marketplace.

Glovo Business Model

Glovo is a Spanish on-demand courier service that purchases and delivers products ordered through a mobile app. Founded in 2015 by Oscar Pierre and Sacha Michaud as a way to “uberize” local services. Glovo makes money via delivery fees, mini-supermarkets (fulfillment centers that Glovo operates in partnership with grocery store chains), and dark kitchens (enabling restaurants to increase their capacity).

GrubHub Business Model

Grubhub is an online and mobile platform for restaurant pick-up and delivery orders. In 2018 the company connected 95,000 takeout restaurants in over 1,700 U.S. cities and London. The Grubhub portfolio of brands like Seamless, LevelUp, Eat24, AllMenus, MenuPages, andTapingo. The company makes money primarily by charging restaurants a pre-order commission and it generates revenues when diners place an order on its platform. Also, it charges restaurants that use Grubhub delivery services and when diners pay for those services. 

Instacart Business Model

Instacart’s business model relies on enabling an easy set up for grocery stores, the comfort for customers to get their shopping delivered at home, and an additional income stream for personal shoppers. Instacart makes money by charging service fees, via memberships, and by running performance advertising on its platform.

Lyft Business Model

Lyft is a transportation-as-a-service marketplace allowing riders to find a driver for a ride. Lyft has also expanded with a multimodal platform that gives more options like bike-sharing or electric scooters. Lyft primary makes money by collecting fees from drivers that complete rides on the platform.

Uber Business Model

Uber is a is two-sided marketplace, a platform business model that connects drivers and riders, with an interface that has elements of gamification, that makes it easy for two sides to connect and transact. Uber makes money by collecting fees from the platform’s gross bookings.

Postmates Business Model

Postmates is a food delivery service built as a last-mile delivery service platform connecting locals with shops. Postmates makes money by collecting fees (commission, delivery, service, cart, and cancellation fees). It also makes money via its subscription service (called Unlimted – $9.99/month or $99.99 annually) giving free delivery on every order of more than $12.

Uber Eats Business Model

Uber Eats is a three-sided marketplace connecting a driver, a restaurant owner and a customer with Uber Eats platform at the center. The three-sided marketplace moves around three players: Restaurants pay commission on the orders to Uber Eats; Customers pay the small delivery charges, and at times, cancellation fee; Drivers earn through making reliable deliveries on time.

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