Why Turo, the ‘Airbnb for Cars’, Is Angering Rental Companies | WSJ

Why Turo, the ‘Airbnb for Cars’, Is Angering Rental Companies | WSJ


(soft music) – Have you ever had to find a rental car after a late flight? Imagine if you were renting
a stranger’s vehicle? Turo, a peer-to-peer car company, brings an element of
adventure to your trip by allowing you to rent a personal vehicle from someone looking to
make some extra money from their car. But rentals like the one I’m doing here are putting the company in the crosshairs of traditional rental car companies. So here’s how it went. After several screens
full of instructions, we find the address for our
car in a nearby parking lot. This is definitely not
quite as straightforward as renting from a traditional
car rental agency. We’re in a parking lot
that’s maybe a quarter mile away from the airport. It’s near the Sheraton hotel and we were told to find the orange cones. We found the orange cones and
we’ve actually found our car. It’s right here. Next step is to take a selfie
of myself with the car. Good shot. After verifying I’m the renter, the car’s owner electronically
unlocks the door for us. We’re checked in, we’ve
done our inspection. Let’s go. The two-day rental of this 2019 BMW X3 comes to, without insurance, $160. A comparable luxury SUV
from National Car Rental would’ve cost us 37% more. National’s quote for $220
includes $66 in taxes and fees. Turo says nowhere in the US
are those same fees and taxes being imposed on its customers. And National points out, in this example, that its contract includes
unlimited mileage, whereas our Turo rental does not. All right, we’ve got our fancy wheels. Now, tomorrow, we’re gonna
meet the owner of a car who rents it on Turo, but
it’s a really different car than the one we’ve got. (door slams) How’s it going? Jason.
– How are ya, Kris. – Good to meet you, Kris.
– Nice to meet you. – I’ve never seen a Slingshot
before, I have to say. – I haven’t either until I went to Hawaii. (laughter) – [Jason] Kris Mullins and his Slingshot is what Turo says it’s all about, extra cash for car owners and unique experiences for renters. How often are you renting this out? – [Kris] Four to six times a month. – [Jason] Mullins rents his Slingshot for around 100 bucks a day. With his monthly car payment, he paid $15,000 for the Slingshot, and other costs, he says he’s
pretty much breaking even. But he says he sees the
potential down the road to come out ahead. – The more people catch on
to it, the more subscribers, the more people that understand
what it is and are aware, the more people will be
able to rent their cars. And I don’t mind adding another car to it. – [Jason] He says he’s had
no major issues with renters. Like the established companies, Turo offers insurance to renters. It also insures the hosts
for accidents or damage that occur during the rental. But, as an example of
these cars in Denver, if a car is damaged or
stolen between rentals, it falls on owners and
their own insurance. The big car rental agencies are focusing their ire less
on individuals like Mullins and more on these types of people. Are you guys doing rental for Turo? When I returned our
BMW to the parking lot, I met Carloz Basan. – I’ve personally done
around 1,800 trips with Turo. – [Jason] He and an employee
were prepping cars for renters, assembly line style. Most of the vehicles had
lockboxes on their windows. – A lot of business travelers rent cars. – [Jason] Basan tells me he’s
among five Turo power hosts who’ve got 70 cars at this San Diego lot. So you’re making a
full-time living doing this? – It is full-time living, yes. – For Turo, is this a
problem or an opportunity? (knuckles rapping) I went to San Francisco
to meet with Andre Haddad, Turo’s CEO. He’s aggressively trying
to grow his company, now valued at more than a billion dollars. How many people do you have now? – We have a bit more than 350 people now. We’ve been growing our team
roughly 100% every year. – So this time next year, you
think you’ll have 700 people? – We might well have 700 people
this time next year, yes. – Really? Haddad shows us the six cars he owns, all of which he rents out using Turo. – So let me show you how this works. You put this button here. – [Jason] Including this Tesla Model X he bought four years ago. – I’d say the first year, when everybody wanted to drive one, I was renting it out at
more than $500 a day. – $500 a day? On this day, Haddad’s
using it to get to work. So when people describe your
company as the Airbnb of cars, what do you say? – I’d say that’s just about right. – [Jason] Like Airbnb,
Turo is the dominant player in its peer-to-peer market. – Selection, price, and
convenience I think are the reasons why we think fundamentally we are better than traditional rental car. – When you have the slogan,
Way Better Than a Rental Car, that must antagonize the incumbents, the rental car agencies. – We are not intending to antagonize them, but they are, in many ways, the
reference in people’s heads. – Do you think you’re
eating into their business? – Partly, but that’s not
really the core of Turo. I mean, our core mission
is to enable people to monetize their cars. We’ve obviously run into the antagonism and the hostility from
the rental car industry because they’re not used
to seeing competition. – It’s kind of like what Airbnb dealt with with the major hotel companies. There was a lot of pushback. In the case of Airbnb, the
hotel companies were saying, “Well, we have to pay all
these taxes, these fees, “and Airbnb hosts, they
don’t have to do that. “That’s unfair.” Is it a similar situation for you, especially when you have
people renting at airports? – Yeah, there’s absolutely
the same situation for us. – Is it fair? – What they don’t like to talk about is the significant tax subsidy they get because they actually don’t
have to pay any sales tax on any of the cars that they
purchase for their fleet. – Enterprise, which
has the world’s largest rental car fleet, calls
this argument a red herring because companies, whatever
industry they’re in, typically don’t pay sales tax on equipment they purchase for commercial
purposes, including rentals. Enterprise says peer-to-peer operators hope to avoid applicable
taxes, plain and simple. Turo’s response: What we hope to avoid is having a competitor dictate how we should be regulated and taxed. Airbnb says, since 2014,
it’s established agreements with local governments around the world and it’s collected more than $1.5 billion in transient occupancy taxes to date. With Airbnb, you had people who basically came hoteliers themselves. They would have entire buildings that they would start
renting out on Airbnb. Do you have some customers
who are creating their own mini car rental agencies at airports? – We don’t have the same kind
of scale that Airbnb has, but we have some car
enthusiasts, like myself, who have found Turo to
be a great opportunity to be able to get another car,
a third car or fourth car, because the reality is,
when you bring these cars and list them on the
app, they can generate a lot of earnings. So it’s still a small
percentage of our community that’s going out and getting a second or a third or fourth car. – Well, are people creating
businesses, entire businesses of renting cars using Turo? – I don’t think there’s
anything of that scale of, like, creating a business. – [Jason] Enterprise says that many hosts actually own or operate fleets of 10 or 15 or even more vehicles on these platforms. It’s our opinion that all
rental car transactions, including those through
peer-to-peer companies, have the same tax obligations that every other car
rental provider has today. Turo acknowledge that
some entrepreneurial hosts have embraced the economic opportunity the marketplace provides. (soft music)

100 comments

  1. I called enterprise to rent a truck to tow a boat. They said i could tow or haul anything with their trucks. I asked whats the point of renting out trucks if people cant use them like trucks? They hung up on me.

    I rented a truck from turo and told the guy id be pulling a boat from SA to HTX. He said great, thats what trucks are for.

    Some turo vehicles do come with unlimited miles. Its up to the owner. The truck i rented came with 1000 miles, enough for my trip by far.

  2. Can't get over how bad their security is. They wanted me to send some random number a copy of my driver license. I wouldnt mind doing it over an app but can sending it over regular phone channel be safe? I have no idea who the person is on the other side and where they are in the world.

  3. I could use this app, my car's usage has decreased like 90% since the new train station was available in my housing area . When will it be available in Asia? 😮

  4. After Air BNB came out and these giant car rental corporations couldn’t think to do something similar with all the extra cash for RnD. Guess what buddy, your fault.

  5. Turo has it's pros & cons & somewhat pricey but as a young driver with squeaky clean driving history rental places charge 2 much or don't want 2 rent to me so it's a hassle getting someone 2 rent a car 4 me so I would say Turo is better if it's available around u & hopefully a area where it's more likely for u 2 get a nicer car than what u own

  6. I used Turo to rent a Tesla Model 3 for my birthday. It was a blast, and the whole process went so smoothly. Turo let's you have access to far more cool cars than you would with a traditional car company – and often for cheaper too!

  7. Car rental companies have a bad image but don't think that Turo is different. As all companies, they want to maximize profit. So many people here think they are different and cool. You are falling for marketing, RIGHT NOW.

  8. Avis charged $900 chevy malibu 5 day trip with minimal insurance. Turo charged $200. Was able to rent a 5 day Tesla for $600 under Turo. That would’ve been $2000-3000 under these ripoff rental companies.

  9. As this evolves, competition will drive prices down while increasing profits. Elon Musk's plan to enable a million robotaxies in the near future will mandate more competitive pricing. The paradigm is shifting.

  10. The company is there to provide the consumer not the other way around !! Whats going on , people forget people and overprotect Big business with Big profits . Come on !

  11. I hope that guy with the slingshot earns enough to buy himself a razor so he can finally finish shaving. Bless him his razor must've broke halfway through

  12. True entrepreneur, saw a problem, bam he solved it. He's making money, the car owners are making money, the renters are saving money. Well done sir, I'd be seething if I was a rental company too.

  13. I remember seeing the ad for turo a long time ago. I remember thinking “ who would ever rent out their car?” I trash rental cars, why would I want someone to do that to my car ? I can’t believe this is actually profitable

  14. @07:10 so, Enterprise thinks also that Turo renters should not pay taxes when buying cars to their fleet? that is a good attitude! (they are contradicting themselves….. most noticeable act of a desperate one -I despise the small letters on their contracts) . go Turo!!

  15. Hate that they -rental company – give me a Hyundai Elantra when I want a midsize sedan and they think a Toyota Avalon is a luxury vehicle

  16. I hope Turo will set minimum standards because everyone keep reducing prices to get clients. Working for peanuts. Turo on other hand still gets their commission no matter what

  17. my auto insurance will cover a regular rental. it will not cover a Turo rental. i had to pay and extra $33 a day for Turo insurance

  18. This is capitalism baby !!!!! I just have an issue with capitalism when it has to do with peoples health and education. Bernie 2020

  19. I have used Turo once before, and I wasn’t impressed. I got a car very different from the one I rented, I stayed waiting for some time at the airport for them to show up, and got charged for every toll I passed through even though I paid cash on all of them (the policy wasn’t mentioned anywhere and the owner later apologized for that) Since then I have rented more than 8 times through the conventional car rental companies and never been as disappointed. There is a great amount of uncertainty when it comes to renting from Turo and I would rather not have that.

  20. Usually I am not 100% sure of apps like Uber because it would ruin black cab drivers lives here in London, but if Turo means car rental companies are gonna stop being stuck up, the I'm all for it

  21. You neglected to add the CAR COMPANIES are angered. I'm not going to spend 30 or 40 thousand dollars to buy Camaro or other hot car. I will rent it on Turo, drive it and GET IT OUT OF MY SYSTEM….

  22. twin motor Nissan Leaf, 680nm and most advanced 4 wheel drive tech available in 2020, seriously safe despite massive g-forces

  23. this seems to be approaching a N. Korea or communist china societal type structure, where people don´t own anything, just have rights to use everything

  24. Used Turo for the first time earlier this month. Was a bit skeptical and worried about how it would work but the host was great (he had 7 other cars for rent and knew exactly what he was doing) and made the process super easy. Over an 8 day period, I saved $200 vs a traditional rental. Deal.

  25. extremely bad news for everybody, why marry when you do the prostitute cheap skater style, drive an exotic car for the day, and you can say, "been there done that", why would I spend 200k on a car if I can get it for the day, and get it out of my system. R.I.P. luxury car manufacturers

  26. 3:34

    Every time one hears or reads the letters IAC

    One cannot help but think of TicketMaster. Even though technically Ticketmaster is no longer a part of IAC – the reason that Ticketmaster is the way it still remains today is almost exclusively because of IAC.

    Remember that when you buy a ticket for almost any venue in America; Ticketmaster is the monopoly of it all. You'll also be sunk with fees and conditions. The same Ticketmaster where a majority of it's operations are in West Virginia of all places.

  27. same thing the Cab companies were whining about when Uber came out.
    too many clowns don't understand free enterprise & free markets.

  28. Oh so the big companies got salty because someone used the free market in a better capacity than they did? That sucks bro, but move on or figure it out.

  29. I still have to use Turo but is think I’ve had good deals and good treatment from rental companies every time I rent a car but if I can do a cheaper way I am all for it

  30. Much better for the end user than the renter from many testimonials of very very difficult times with damage claims being denied through the standard turo insurance

  31. I love turo for personal usage. I can rent amazing cars for a small price and love national for my business trips, I can walk directly to the car I want test it and pick another one.

  32. like Airbnbs mass shooting in Orinda, what if a vehicle is involved in a drive by shooting or a getaway for a bank robbery?

  33. It's not just rental companies being screwed, but we're screwing ourselves. What's going to happen is that car purchase prices are just going to go I because of this

  34. I have a really bad experience using Turo. If everything is following the best (and only) scenario, things are great. The first time something goes off script, you are screwed. The support doesn't work properly and you get charged A LOT extra.

  35. Does anyone know what happened to the guy who lent out his Tesla on getaround and the driver killed a man in San Francisco? Was he covered by the company? Seems like a huge liability risk. I wish they would have addressed that in this video.

  36. Peer-to-peer renting is great for the masses but I'm not so sure about individuals developing fleets on Turo. Isn't the point for Average Dan to rent his primary or second car when he's not using it, but an individual with a fleet would take more competition away from a single car owner?

    Also what is Enterprise opens up a Turo account and starts renting cars? It would be like the hotels that list rooms on Airbnb.

    Airbnb just announced it would verify ALL listings following more incidents occurring at rentals plus give more support for guest and easier refunds. If incidents start to happen with rental cars on Turo, such as accidents or situations from insufficient car maintenance, will Turo eventually be regulated like rental car companies? Are we coming full circle?

  37. It is a good thing that all the swampy companies are angry, every time innovation came around the old dog got angry and tried to stop it.

  38. Turo is fine as most people are not driving their car all of the time, and no one else is being deprived of a car, and does not increase the cost of car rentals.
    Airbnb is not fine as they are often taking rooms and apartments away from renters, and raising the price of rentals due to reducing the supply of rentals.

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