Exploring the Turo Business Model - How Turo Makes Money

Exploring the Turo Business Model - How Turo Makes Money

The ride-sharing industry has changed the way people move. We have never had so many options for transport commuting. Car-sharing services are becoming more popular, and riders are choosing them over traditional car rental companies. The fact that car-sharing platforms enable users to rent cars for less money adds to the market's growth as new competitors enter the picture.

Car rental businesses are the new trend. Over the next eight years, peer-to-peer rental businesses are projected to expand by roughly 700%. If you think that the rental car market is profitable as well, keep reading to find out how a car-sharing program like Turo operates. We talk about Turo's revenue streams and business model here.

What is Turo?

Turo is a peer-to-peer car-sharing platform. It lets customers connect with hosts and book cars. It assists travelers and car renters in choosing a vehicle from a large selection that meets their needs. Additionally, car owners who rent out their vehicles can earn additional revenue. Turo allows owners of all kinds of vehicles to list their vehicles, from luxury cars to pickup trucks.

Facts and Statistics about Turo

• Founder: Shelby Clark
• Headquarters: San Francisco, California, United States
• Year of Foundation: 2009
• Industry: Car Sharing
• Company Valuation: more than $1 billion
• Total Funding Amount: $502.6 million
• Countries where Turo is available: 56 countries, including the United States, Australia, France, and the United Kingdom.

Turo Success Story

In 2009, Shelby Clark and Jonathan Tilmann founded the peer-to-peer car-sharing platform Turo. Tilmann and Clark came up with the idea of trying to figure out how to split a car for a weekend getaway. They created a service after realizing there wasn't one that let users do this.

Turo is a distinctive car-sharing platform that enables users to rent out their vehicles to other people. People rent out their cars when not in use to augment their income. It also allows people to drive different cars on business trips or vacations. When Turo was still known as RelayRides, users could rent out their vehicles to other people. In 2012, the company rebranded itself as Turo and started renting cars to companies instead of private customers.

How Does Turo Work?

Turo offers a business model that allows a simple and efficient workflow.

• Users must first register their accounts by providing an email address or phone number.
• Users will now see available cars to rent after providing their location and preferred times.
• Customers can choose a vehicle and view the projected costs.
• Once customers have reviewed the listing details, they can verify their reservations.
• Users either pick up the car keys directly from the renters or opt for delivery, which will incur additional fees.
• Users can get on the road and write reviews about their overall Turo experience after receiving the keys.

Turo Business Model

The Turo business model serves as a marketplace connecting car owners and renters. Next, let us see how the Turo platform works.

Customers Segments

The customer segments of the Turo business model consist of car owners and renters.

1 Car Owners

Car owners interested in renting out their vehicles can list them on the Turo app, providing essential details about their cars. This information assists renters in selecting a vehicle that meets their specific needs. By renting out their vehicles, car owners can generate significant income.

2 Renters

Renters may need vehicles for various reasons, such as vacations, business trips, or short-term needs. The Turo platform offers renters numerous advantages, including cost-effectiveness, convenience, and safety.

Turo Revenue Model - How Turo Makes Money

There are several different revenue streams in the Turo business model, including the following:

1 Service Fees

This is one of the company's main sources of income. To use the platform, renters and car owners must pay Turo service fees. Usually, these costs are calculated as a percentage of the rental price. Depending on the types of vehicles and insurance plans that users and hosts choose, this factor may change.

2 Insurance Commissions

The company even provides insurance for renters and car owners. Here, the business offers this coverage in collaboration with insurance providers. When renters and car owners purchase insurance from these companies, Turo receives commissions. This one is also a good source of revenue.

3 Young Drivers Fees

Turo charges a specific fee for young drivers aged between 18 – 25 in the United States and for the age group of 18 – 24 in the UK. So, the young driver’s fees are also considered a revenue source.

4 Supplementary Fees

Turo charges myriad fees to guests add-on services or extra kilometers. Moreover, Turo also offers to rent out luxurious cars and charges additional fees for renting.

5 Turo Go

The business offers a specific program named Turo Go, where renters can access the rented vehicles with their smartphones. So Turo may charge fees to use such advanced tech services.

6 Cancellation Fees

Things can happen under some circumstances when users have to cancel their bookings. In this case, if the user cancels their bookings after one hour of booking or before 24 hours of trip starts, they are eligible to get free cancellation. After the free cancellation period, users are required to pay cancellation fees as described in the policies.

Certain revenue streams, like trip fees and extra mile fees, are common in the Mobility as a Service concept and are also present in Turo.

Also Read: "The Ultimate Guide to Developing a Car Rental App Like Turo"

What Makes Turo Successful?

The success of Turo can be attributed to several key factors, which are as follows:

1 Flexible Business Model

As far as we know, the brand does not provide customers with goods under the Turo business model. Thus, logistics channels and inventory management are not required. Rather than requiring users to go through the ordering and tracking process, the company aims to create networks of cars where users can find their ideal car type and rent it accordingly.

2Insurance Coverage

Turo offers its insurance coverage for both renters and car owners. Liability insurance and physical damage protection are included. Turo covers protection against accidents and damage to the rented car. Owners have the option of using both their personal insurance policies and Turo's insurance.

3User-friendly Technology

The easy-to-use Turo website and mobile app make it easier to list cars, reserve rentals, and handle transactions. The user experience is enhanced by features like convenience and Turo Go, which allows for remote vehicle unlocking.

4 Extended Service Area

Turo reached markets outside of the US by expanding its services abroad. Through this international growth, the business was able to reach more travelers all over the world and access a larger customer base.

5Diverse Selection of Vehicles

From regular cars to expensive luxury vehicles, Turo's platform accepts listings for many automobiles. Renters will find it a flexible option due to its diversity, which meets customer needs and preferences.

6 Customer Support

Turo offers top-notch customer service to help drivers and renters with any problems. Additionally, the business is concerned with resolving any issue during the rental procedure or while the travel is still in progress.

7Secure Environment

Turo has put in place security and trust measures, such as user reviews and ratings, insurance, and round-the-clock customer service. By taking these precautions, users can feel more confident in one another and feel safe while transacting.

Because of its dedication to user experience, safety, and innovation, Turo has grown into a well-known app in the sharing economy.

Want to Launch a Car-sharing Service Like Turo?

The success of the Turo business model has motivated numerous entrepreneurs to enter the car-sharing market. Selecting the ideal team and tools to develop a platform akin to Turo will offer your users an exceptional experience. Through careful planning and strategy, you can enhance your business's positioning.

Conclusion

Turo has thrived in the car-sharing market by providing a distinctive value proposition that meets the needs of every user group. The Turo business model is robust and generates substantial income by charging car owners and renters. However, we can say that the Turo business model is diverse, allowing it to earn a hefty profit.

Grepix Infotech provides a swift and economical route to penetrate the bustling car-share market with taxi app development services. By adopting a tried-and-tested framework, businesses can prioritize customization, brand identity, and exceptional user experiences. Armed with the correct strategies and continuous support, your car-share app is poised to excel in this vibrant sector.

Success hinges on a deep understanding of your target market, selecting the optimal white-label car-sharing app solution, and ongoing innovation to cater to changing customer demands. Whether you're a burgeoning startup aiming to establish a presence or an existing enterprise looking to broaden your reach, our white-label rideshare app development can unveil new possibilities and propel your growth.

Eager to advance? Collaborate with us to create your car-sharing app like Turo and transform urban mobility. Reach out today to discover more about our offerings and how we can assist in realizing your aspirations.

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