Turo Adds Months-Long Rentals as Ownership Alternative

Bloomberg

Watch Turo Adds Months-Long Rentals as Ownership Alternative - Bloomberg on Dailymotion

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00:00Let's just start by explaining the mechanism. How does this work?

00:03So it's pretty simple. You know, if you've known Turo, you know that we offer car rentals now for many years.

00:10Typically, our car rental trips were a few days at a time, typically for travel.

00:15Now, you can actually book a car for multiple months at a time and you pay on a monthly basis,

00:20as if you're paying a monthly lease or a monthly financing repayment on a monthly basis.

00:26But there's no upfront commitment. So there's no money down.

00:30Money down. Yeah, there's no deposit. There's no commitment for an extended period of time.

00:35You can sign up for one month and extend for another few months or you can sign up for three months and extend or reduce.

00:42But here's the disconnect, Andre, that I know it is a peer platform.

00:47In other words, the cars on Turo are owned either by individuals or, as you and I have discussed,

00:52people that have made a business of having a small fleet of vehicles.

00:56How does that that tension work of somebody saying, OK, here's my car.

01:01I'm going to rent it out for a few months.

01:03Well, there's a lot of people on Turo, as you mentioned, that are now professional hosts who are,

01:08you know, running a business on top of our platform.

01:11And they're really interested in getting maximum utilization for their vehicles.

01:15And they're also able to acquire vehicles from their neighbors and from their friends and from their family members.

01:22We call them co-hosts. So it's not just their own cars.

01:26Typically, these power hosts, as we call them, they have a few cars of their own,

01:32but they're actually fleet sizes much larger because they are co-hosts for many other car owners

01:37who've given them their car so that they can monetize them on their behalf.

01:41And so these hosts are looking for ways to maximize their utilization.

01:45So they're very excited about the launch of monthly because it enables, you know,

01:49multi-months of utilization in one trip instead of having lots of different trips on a monthly basis.

01:54Who sets the price?

01:55Our hosts set the price.

01:57So we actually guide them to provide the most effective price.

02:01So we give them recommendations on pricing.

02:03And we find that many of our hosts are, you know, following our recommendations.

02:07For this launch, we have dramatically lowered our monetization.

02:11So now our trip fees are down to zero on monthly trips.

02:15So we're...

02:16What's in it for you then in the long run?

02:17Well, we're actually monetizing our trips only on the host side and with the sale of protection.

02:23So there are three ways we monetize our trips.

02:26We've got our trip fee, our protection fee, and then our host fees.

02:29We've kept the host fee.

02:31We've kept the protection fee.

02:32But we've zeroed out our trip fee because we want to make sure that these monthly rentals are as affordable as possible.

02:37In the time that I've known you, you've always been directed by data and evidence.

02:42What do you see about the future of car ownership?

02:45The threat that I see to Turo has been what Tesla proposes to do, right?

02:49Operate a robo-taxi fleet where Tesla owners can submit their car to participate in a robo-taxi fleet.

02:56Existentially, there's a lot of car ownership questions.

02:58A lot of car ownership questions.

03:00As you mentioned in the beginning of the show, while car sales are resilient, they're still down from their peak.

03:06And we've never recovered from the peak of 2017 when we hit 17.5 million vehicles sold in the country.

03:11And I believe that we've really reached peak car.

03:14We're never going to go back to 17.5 or 18 or larger numbers because people are looking at different ways to access cars.

03:23And we believe that Turo has a big role to play now that we've expanded our product offering to attack a much larger TAM.

03:31The car ownership TAM is a trillion dollars, whereas the car rental TAM is only $100 billion.

03:36So we're pretty excited about this launch.

03:37Andre, you and I have a tradition.

03:39It's where I ask you about IPO.

03:41And given that circumstances have changed on and off over the last year, what's the latest thinking?

03:47The latest thinking is we still don't think it's the right time for us.

03:51You know, we're taking a lot of big decisions internally to retool some parts of the business.

03:57We're excited about this launch.

03:58As I mentioned, we think it expands our opportunity in a much larger market.

04:03We think that's going to help accelerate our growth and profitability.

04:06So we look forward to be back and talking about the IPO at some point in time.

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