Choose a life. Choose a job. Choose a career. Choose Monzo, Revolut, and Glint. Choose holidaying in someone else’s home. Chose WeWork and Huckletree. Choose renting your car to others – with Turo – and wondering why you never thought of it before. By paraphrasing the famous line from Danny Boyle’s classic film, Trainspotting, it is possible to succinctly summarises the changing attitudes of today’s working generation to banking, living, and mobility.
Increasingly, we choose to bank through fintech companies like Monzo, stay in an Airbnb, and work in a WeWork space instead of a traditional company office. The latter two examples fall under the umbrella term “the sharing economy”, which describes how one asset is shared between private individuals to meet their various needs. The rise and fall of many companies in this new transient economy has been well documented.
The growth in peer-to-peer (P2P) car sharing has, however, received less critical discourse than their home and work sharing counterparts. In the UK , this is in part due to there not being a clear frontrunner in the P2P market and a general misunderstanding of how car sharing works. Becoming the most important player in UK’s P2P market could be an interesting challenge for Turo, the world’s largest car sharing platform, entering the UK market this month.
Turo has currently more than seven million users. It is growing very fast every year under the watchful eye of CEO, Andre Haddad. Turo’s success is based on a very simple concept: the car on your drive-way is a depreciating asset which both goes through periods of underutilisation and carries significant overheads – e.g. MoT test, tax, and personal insurance cover. However, by listing your car on the Turo platform you can “share” it with other likeminded individuals and off-set the costs associated with car ownership through creating an extra revenue stream.
You are in full control of the car’s availability on the platform as well as the location of collection and drop off. Importantly, while the car is being “shared” it is fully covered by Turo’s comprehensive protection plan. This means that the guest is verified and you are covered in the event of an accident (detailed information on this can be found here). From a guests perspective, CMO Andrew Mok states that, on average, a Turo vehicle costs 35% less to hire than traditional car rental.
In the run up to Turo’s UK launch, I sat down with Andre Haddad to discuss the finer details of Turo and to ‘deep dive’ into the complexities of providing an insurance package to cover people and vehicles alike. Commonly referred to as the ‘Airbnb for cars’, Andre is quick to point out that as a concept Turo is actually a novel idea.
Andre Haddad: Sharing one’s car with a perfect stranger has never been attempted before. There is really no precedent for the idea of Turo before Turo. Whereas, there are many precedents for many of the other successful market places, including Airbnb. Before Airbnb there was a long history of people sharing vacation home rentals or room rentals and homes. The difference with Turo is that there is absolutely no precedent for what we are doing – this idea that you can earn money with your car and that the car is an actual asset that can pay for itself – it’s a completely radical and new idea
As this was such an important leap into a new idea, it was important that we offered hosts an experience that they would be comfortable and confident with. We found that to date, the best way for people to become comfortable with the idea of hosting others in their vehicle is by getting to know them a little bit – through a profile page, exchanging messages, and then, at the critical moment when the guest shows up, being able to look them in the eye and tell them: this is my vehicle, I’m trusting you with it – here are my keys!
In the Photo: Turo logo. Photo Credit Turo
This approach helped Turo build adoption among an early audience and overtime helped increase awareness of P2P car sharing. Now, after successfully launching P2P in the U.S., Canada, and Germany, Turo are able to leverage their operating history and growing momentum to help pitch Turo to new markets.
Andre Haddad: It’s amazing to be still at this stage of size of the business growing at 100% year over year (YoY). So, that momentum is very powerful, and I try to leverage it in helping make our pitch to all our stakeholders – whether it’s our team members, our partners, our community members – easier”.
Under the reins of Director Xavier Collins, Turo is launching its P2P car sharing in the UK. This, Andre explains, is a calculated decision based on simple numbers of supply and demand: the UK is the most popular destination for Turo users outside of North America and the UK population has been the most engaged audience of all overseas travellers.
It has not been all plain sailing. One notable challenge facing the UK launch has been negotiating an insurance contract which has taken over a year to complete. I asked if this delay had put Turo at a competitive disadvantage to competitors such as Drivy, Easycarclub, and Zipcar who have had longer to establish themselves in the UK marketplace. While he admitted that insurance had been the main barrier to the UK launch, Andre was quick to offer a counter argument by stating that pause had enabled Turo to put together the best P2P insurance product in the UK.
Andre Haddad: We are able to insure everyone wherever they come – that is unheard of in the UK market. So, you don’t need a UK driver’s license or an EU one, you can be from North America, you can be from anywhere – that, I think, is a huge win for us. The other big win for us is we have been able to put in place a no deductible protection package for guests – I am very excited about that. Finally, we have been able to open the marketplace to vehicles whose value goes up to £75,000 – that’s really exciting.”
Additionally, Turo’s pure size – they should reach 10 million signups by the end of the year – dwarfs that of its nearest European rival, Drivy; suggesting that they will attract considerable demand for UK vehicles from oversees travellers. Turo’s business model can also adapt to trends in consumer car preferences. For example, it is well placed to utilise the shift towards electric, hybrid, and autonomous cars. At the moment, many of these cars are expensive and out of reach of the everyday person. Turo, however, would allow you to rent a new Tesla Model S and trial it. In turn, this can influence the decisions people may make on their next vehicle purchase. A quick browse on Turo reveals that you are able to rent a Tesla Model S for £105/ day or, if the moment takes you, a 1986 DeLorean for £395/day.
In the Photo: The incredible DeLorean, one of the cars you can find on Turo. Photo Credit Turo
Peer-to-peer car sharing is fast becoming a fixture of daily life. Andre believes that in the next ten to twenty years we are going to see an accelerated transition in the world of mobility. At a local level this certainly holds true; just look at how major cities such as London are evolving to combat congestion and fight carbon emissions. In cities like this the cost of ownership and parking is also becoming unsustainable and, in the vacuum left by car ownership, a sharing economy underpinned by apps and Artificial Intelligence has swept in. This, Andre states, will be the catalyst for macro level changes in shared vehicle ownership.
Andre Haddad: Over the next five to ten years the world of mobility 1.0 is going to transition into the world of mobility 2.0 in which personal vehicle ownership is going to decline significantly – especially in big cities – and that decline is going to be accompanied by a fast rise of your phone as your access to vehicles. Your phone becomes your mobility solution – where you have a bunch of apps that you will be using based on the kinds of trips that you would like to make – whether it’s very short distances, micro-mobility, using public transportation apps, bike sharing apps, or electric scooter sharing apps. In the segment of intra-city where the distance is 5 to 15 miles – that is the sweet spot where ride hailing makes a lot of sense in addition to public transportation and taxis. And then finally, for trips that are more than 15 miles is where Turo plays a big role – where you want to have the car for longer, travel further distances, and have control over where the car is stopping and where it is headed”.
What about autonomous vehicles?
Andre Haddad: I think autonomy is going to accelerate that intra-city segment. L3, L4 technology for autonomy is well positioned to address intra-city trips because those are going to be trips where the vehicle is going to travel less than 25mph, on heavily used routes where there is lots of data to draw on, and probably restricted to certain routes within an urban setting. As those autonomous technologies become available the first fleets that are going to deploy them are ride-hailing companies like Uber and Waymo, and they are going to deploy them in this intra-city environment, and that is only going to help accelerate the cost reduction for those trips per mile as there will no longer be a need for a driver. This will help accelerate that transition from a world where I mostly drive my car to a world where I mostly use my phone to be able to fulfil all my needs for transportation”.
The world of mobility is changing. Your mobility solutions will now be delivered by a selection of apps on your phone. Some, you will already be familiar with – Uber, Citymapper – others like Turo are less familiar but could soon become the industry standard in mid-long-term travel. Bring on mobility 2.0.