Turo Business Model
Turo Business Model and Revenue Model Revealed
June 08, 2022 03:30 PM
Turo Business Model
June 08, 2022 03:30 PM
Turo is a reputable peer-to-peer vehicle-sharing platform. It authorizes people to lease out their vehicles and make some additional money on the side. It is also helpful for renters as they can find their preferred rides at cheaper rates. This model is a little different from your regular car-rental apps like Zipcar.
If you own a car that you don’t utilize often, you can rent it out on Turo and make some extra cash. You can rent out other kinds of vehicles. From saloon automobiles to pickup trucks, Turo lets all types of vehicles. You can even lease your luxury car if you want to.
Turo has its services known in nations like the US, the UK, and Germany. You can lease vehicles on Turo at any given time at reasonable rates. To use Turo services, you ought to be at smallest 25 years of age. Otherwise, you will not be permitted to hire vehicles.
Turo is often compared to Airbnb. It is an easy platform that lets you lease or hire any type of vehicle you like. Just enter a date and location and begin looking for vehicles. You can make your searches clearer by mentioning car brands, models, brands, and types.
Once you join the parameters, you will be shown a list of vehicles related to your search. Not it’s up to you to choose a car and finish the booking procedure.
You can either choose up the vehicle from a set place or get it delivered to a pick-up point of your preference. However, this turns on whether the owner agrees to it or not.
The good thing is both the vehicle proprietor and the client are protected by various insurances delivered by Turo. For instance, liability insurance covers injuries of up to $750,000. Besides that, you can avail 24/7 client support as well as road service from Turo.
Presently, Turo is available in over 7,500 cities across Canada, the US, and the UK. You can access their service by visiting the authorized website. Or you can download the Turo mobile app on your phone. The app is consistent with both iOS and Android devices.
There are numerous value propositions and USPs that enabled Turo to acquire a large consumer base. Along with them, the different pros of the company model, multiple funding rounds, and Turo’s strategic terms and conditions also contributed to the platform’s success.
Turo’s P2P company model was unique at the moment of its launch. Despite being a difficult project in 2010, Turo’s company model enabled the business to overcome several challenges that existed in the traditional car rental company model. For instance, Turo’s car rental company model eliminated stock management and car delivery troubles. Moreover, the involvement of user-owned inventory led to the creation of user-generated content: ranging from product listings on the platform to the word of mouth marketing on social media.
A strong worth proposition of Turo is that its services are available even in the various regions of the country. For instance, Turo’s services get to those market regions where traditional car rental companies cannot reach or do not exist. A few instances of such markets are rural areas, remote towns, and less populated areas.
Regular car rental companies are susceptible to a fleet shortage at different times. They also have to pay the revenue generated on fleet management. However, Turo incentivizes people to use the platform for renting out vehicles. This incentivization provides Turo a near regular availability of fleet without the presence of any acquisition and maintenance costs.
Turo provides 24/7 roadside assistance to all its clients. In case of any breakdowns or any other car-related problems, the customers can get in touch with Turo, who then dispatches a service vehicle free of cost. This on-road assistance provides consumer safety on the platform and makes Turo a reliable car rental business.
Turo suggests car owners (hosts) and consumers (guests) different types of insurance plans. These usually cover car injuries for the host and third-party insurance for the guest drivers. It is because of these insurance plans that car owners feel secure to list their automobiles on the platform. Along with roadside help, these insurance plans create a platform reliable for consumers as well.
Turo takes consumer feedback seriously and tracks different KPIs to plan a comprehensive approach for tackling industry issues and directing the marketing efforts in the right direction. Turo’s CEO, Andre Haddad, made the following statements regarding the firm’s data-driven efforts:
User Management: User management features, such as the chance to view all booking history, user profiles, and all finished and failed payments are essential in a P2P car rental marketplace.
Rental Security Management: This module is inclusive of elements managing rental security and removing reimbursements to cover costs for any car damages.
Booking Management: To consider existing and new orders, see rental period, track booking status, client details, and car owner details.
Booking Calendar: A UI-based part to assist clients to choose rental dates. A booking calendar also assists in invoicing and fitting vehicle availability.
Location-based Search: Crucial to allowing clients to find vehicles in their proximity. This facilitates the decision-making time and simplifies the rental experience.
Chat Messenger: A communication module between consumers and car owners to clear any pre-booking questions.
Custom Information Fields: Needed to manage and show the most relevant details about the cars from car owners. These areas can be edited, added, or terminated anytime. Some instances of these fields are ‘pet-friendly’, ‘non- smoking’, ‘snow tires’, etc.
Product Comparison: To allow clients to compare multiple rental cars based on make, fuel type, model, engine, seating capacity, boot space, and even the admin-created custom fields.
Product Inspection: Needed to inform the admin and car owner of any damages already present on the vehicle at the time of pickup/delivery.
Document Verification: To manage and verify essential documents such as the consumer’s driving license, vaccination certificates, and more.
Agreement Management: To sanction and handle the respective terms and conditions of individual car owners.
Rental Add-ons: To sell complementary products and services such as car wash, child seats, body cover, chauffeur, extra miles, insurance, and more.
Later Cancellation/Return Charges: To retrieve any financial losses due to late cancellation or late recovery from the client’s side.
Turo generates income by charging both hosts and clients. Turo’s company model can be described as an online marketplace for vehicles. It combines car owners and people seeking to rent a vehicle for a determinate period.
Turo makes sure that it has good car models available in every city that it helps. The greater selection of vehicles is benefiting to clients as they get to choose a vehicle of their preference and that too at an affordable rate.
Turo has to create itself attractive enough for car owners, so they get the conviction to rent their cars on the platform. Apart from allowing car proprietors to make money, the firm also provides consultation on how to make the most of their rental program.
Turo has allowed many hosts to set up their companies on the platform. This allows them to rent out several vehicles and generate a good income for themselves.
To make the platform safer and more trustworthy for car owners, Turo presents adequate insurance packages. This covers injuries for both clients and hosts. Besides that, the firm also conducts a background check on the customers before they are allowed to rent vehicles. This guarantees that people employing your vehicle are good drivers.
But there lives a situation with Turo. Many people employ vehicles from Turo for illicit objectives. There have been numerous such points in the past where cars have been used for drug smuggling, human trafficking, and other criminal activities.
Despite all the problems, Turo is well-equipped to become the best car rental business. As long as, car owners trust Turo, the business can resume developing its services and venture into new markets in the future. The best thing about Turo is that it offers vehicles at reasonable rates.
Like most other online marketplaces, Turo earns money from different sources. It charges a fee every time there’s a booking. Both car owners and clients pay a fee. Turo keeps 25% of each booking.
P2P car-rental platforms mainly make money by charging a nominal commission from every car rental booking, which varies from platform to platform. On Turo, the rental charge on every transaction is 25%, which signifies Turo gets to keep a 25% share of the rental fee paid in a transaction.
Along with a rental commission, Turo also demands extra from its clients for additional miles. Further adding up to Turo’s revenue generation model are host fees such as order cancellation fee, damage claim filing charges (only applicable if the host does not upload pre and post-trip vehicle condition photos), maintenance policy violation fee, vehicle misrepresentation fee, and more.
Turo also sets different kinds of guest fees for its clients. Some of these fees are gas replacement charges, EV charging fees, extra usage charges, claims to process fees, guest no-show fees, late return charges, and smoking and pet policy violation charges.
Turo presents a significant source of income for hosts. At the same time, it solves the issue of people looking for vehicles to rent. It charges money from both parties and this is where the firm’s revenue comes from. Get in touch with us.