Thanks to services like AirBnB and Uber, the idea of making money by sharing your assets has become a huge trend. Entrepreneurial types can earn extra income by letting people rent rooms in their homes or hitch a ride around town, but what about letting someone rent your car?
“Those other services (Uber and AirBnB) showed it’s OK to share your assets,” said Cedric Mathieu of Turo. Turo is a peer-to-peer car rental service that allows car owners to rent out their vehicle to make some extra coin. First launched in 2010 in Boston, Turo is another way that people can borrow a car affordably. At the same time, it allows people who have a car but aren’t using it to make some extra money. Turo isn’t the only option, with competitors like Getaround offering a similar service.
Mathieu explained that the traditional car rental experience is “watered down and impersonal.” You have to pick a category like economy, compact, full size, premium or luxury and then you get what they have. Instead, a peer-to-peer rental service allows people to pick exactly what car they’d like. “We have various BMWs, Toyotas, Teslas, VWs,” Mathieu says. There are even more interesting cars on the site: Maseratis, Chevrolet Corvettes and Porsche Boxsters, for example. You can even rent vintage cars, if you’re one of those enthusiasts who like to Drive Tastefully.
“For renters, this is a bit more fluid and allows people to have more choice when picking a car, you can pick and be happy with your choice,” he said, in contrast with the rental-counter-lottery that traditional rental services offer. “It’s also on average 30 percent cheaper than other services,” says Mathieu, mainly because the owners set their own prices.
Turo is available in more than 3,000 cities across the U.S. and Canada, and services are available in more than 300 airports. Renters can pick rides up at the airport when they arrive somewhere. Like AirBnB and Uber, renters get to experience more of a customized experience, with some car owners delivering the car to the renter and more. “Often, car owners will also act as a concierge and provide a list of their favourite restaurants in the area and other tidbits,” explained Turo spokesperson Daniela Kelloway. There’s no shuttle to a rental building outside the airport, and there’s certainly no slow, building frustration from standing in line at a rental counter for a car you “reserved.” Users arrange their rentals through a site or phone app and can communicate with the owners clearly and easily.
However, peer-to-peer car renting isn’t just about the renting experience, it’s about how it can change someone’s car ownership experience and allow them to make some extra money, which is great if the car is just sitting there not being used.
“The main model is for owners to rent out their personal car,” Mathieu says. “It can even offset the cost of ownership.” He said that the average owner makes $600 a month, and some users are even around the $3,000 mark. People can even make their own fleet of vehicles available. “People with more cars can make much more money,” he said.
Since these are personal cars, there are more unique and interesting options to rent. Mathieu even says that that there are some vehicles with manual transmissions available on Turo, which are nonexistent in normal rental fleets in North America.
Protecting the Cars and Owners
Naturally, it’s a bit worrying to let a stranger rent your car, which is typically the second-most expensive thing besides a house that a person buys. Turo has a number of ways to put owners at ease. For starters, all cars on the service are covered by Turo’s own insurance, which is provided by companies like belairdirect, Intact Insurance, Nautilus and Great Divide. Each rental is covered by at least $1-million dollar liability insurance. Turo will also provide damage protection for the actual cash value of the car – up to a limit of $75,000 – for anything that qualifies as a “covered peril” during the rental period.
There are three different levels of ownership coverage, including a basic level that has some interesting terms regarding a damage deductible. With that basic coverage, the owner is responsible for the first 80 percent of any damage costs, up to $3,750, and zero percent above $3,750. On the other hand, the owner can give up a bit of their income on the rental to put their vehicles on the Premium and Standard plans, where there is no deductible for physical damage to the car and if your car is damaged, you’ll have a replacement car while your ride is in for repairs.
The different protection packages take a bit from the owners’ bottom line in order to give them more coverage in case anything goes wrong. The basic plan puts 85 percent of the trip cost in the car owner’s pocket, while the Standard and Platinum plans give 75 percent and 65 percent, respectively.
Canadians get a slightly different take on coverage with $2 million liability insurance, but only one protection package: the standard level that takes 75 percent but requires no deductible for damages.
Turo allows owners to set the price of their vehicle, or allows the price to change dynamically as needed. Owners can also set a mileage limit on their vehicle so their car doesn’t accumulate an unreasonable amount of wear and tear.
Turo does a few other things to help protect owner’s assets. All renters are screened by the company and profiles can be reviewed and rejected by owners if they’re uncomfortable with someone renting their car. Owners also have access to a 24-hour emergency response team to help with anything that can occur.
Of course, not all cars are eligible to be rented out. Turo needs cars with under 200,000 miles and are newer than 10 years old, with a total value of under $75,000, since that’s the most that can be insured by the company. However, a few exceptions are made for truly special cars, such as the vintage ones seen in this post (which are all available in the marketplace).
“Yes, vintage cars are allowed in the marketplace,” explained Kelloway. “Turo handles this on a case-by-case basis – the owner must get in touch with them and send detailed pictures, info about safety (seatbelts, etc.), and confirm that the value of the car is under $75K.”
Great Idea for Road Trips
This summer, the service provider sees the opportunity to deliver the old-school summer road trip experience. It wants users to realize they can grab a convertible, sports car, minivan, EV or any car that piques their interest and meets their needs at a reasonable cost.
It will be interesting to see if this type of service takes off. The traditional institution of car rentals are a common punchline to many road trips: you asked for a medium-sized car and get a compact, or you ask for a premium car and get a Chrysler. They can also be surprisingly expensive. Peer-to-peer car rental services will not only provide the option of a more realistic budget while giving more choice to renters, but also adds another facet of joy to your road trip, vacation or business travel.