In a weirdly shocking revelation, estimates suggest that private cars are sitting unused as much as 95 percent of the time. With Turo, they can now be employed towards more productive purposes than just lying in a garage. Turo lets people rent out their vehicles on-demand via an app, much like an Airbnb for vehicles. Today, Turo is expanding to the UK. In a reversal of its typical expansion strategy, it will focus rental fleets first, and then eventually explore opening up the service to an individual car owner. Turo CEO Andre Haddad explained in an interview,
We’re launching first with what were kind of late adopters of our model in the U.S. We stayed for many years exclusively focused on individuals renting their cars. We’ve seen in the intervening years some of these individuals become rental entrepreneurs, with 5, 10 or 15 cars. And more recently we’ve seen small rental companies come on board.
Those “mom-and-pop” rental operations are the focus of the expansion for the UK launch, Haddad said. They tend to want to compete with the big rental chains but often have only one or a few locations, and no big marketing or tech development budgets of their larger rivals. Haddad said that this approach seemed like the “smartest and fastest” way to enter the market, given what they’re as far as user searches and the concentration of geographic interest is concerned.
Turo has witnessed a significant amount of its users go on to become effectively small rental operations themselves, and part of what’s driving that is how the economics work for people who list their vehicles on its service. Turo has seen that drivers can recoup enough revenue from renting their cars to cover their lease for the month in as few as a couple of days, letting them enjoy cars they wouldn’t normally be able to own because of financial limitations.
Exploring the decision to make the UK its first stop for this overseas expansion draws up an interesting observation, as gleaned by looking at data gathered from existing activity on the Turo platform. Haddad said,
15 to 20 percent of our business is now international, and what we found was that UK travelers were the largest group within that 15 to 20 percent. What was fun to see was that they were booking sort of the American classics, like the Mustang that they can’t easily find in the UK, or the Jeep Wrangler.
However, it is about much more than where users are coming from; people looking to rent were also looking to the UK and London for rentals, even though it wasn’t one of the markets in which Turo operated at the time.
They’ve been using Turo more than any non North American group, on the one hand, and on the other , as we were looking at the data coming out of our platform searches and our traffic, we found a lot of people searching for our cars in London and other locations.
In terms of interest, London was Turo’s largest non-North American city, hence the decision to start there with its UK vehicle availability. Haddad says that it’s generally “really excited” about the potential for its model to spread further internationally, however, so it’s reasonable to assume London is just the beginning.
