Sep 23, 2021 - Economy & Business

Individual car owners are competing with rental agencies

Illustration of Ben Franklin in a sports car.
Illustration: Shoshana Gordon/Axios

With rental cars in short supply, enterprising car owners have amassed their own small fleets of automobiles, renting them out to travelers at a premium.

A snapshot: If you need a car in Boston for a weekend in mid-October, you can rent a Ford Fiesta hatchback from Budget for about $500 — or pay the same for a Maserati Quattroporte from Turo.com, a car-sharing site.

Why it matters: Turo and other peer-to-peer car-sharing services like Getaround and Avail have made it easy for the average Joe or Jane with a few underutilized vehicles at home to compete with major rental car firms.

  • The disintermediators are even offering bonuses of up to $2,000 per vehicle for car owners to add to their fleets.

The big picture: The pandemic wreaked havoc on the car rental business.

  • Rental car companies sold off hundreds of thousands of vehicles when people stopped traveling, but now can't replenish their fleets fast enough, due to supply constraints in the auto industry.
  • That's when private car owners stepped in, through sites like Turo and Getaround.

The intrigue: Turo used to market itself as a side gig for people to make extra income, or as a way for car buyers to stretch their budget to afford a fancier model.

  • The pitch: Rent your car out for a few days a month, and you can easily cover that higher car payment.

But now, Turo is helping enterprising small-business owners manage multi-vehicle fleets.

  • Lazaro Vento is an example: He lists 22 vehicles for rent in Miami, including a Ferrari, a Tesla and multiple BMWs, Audis and Jeeps.
  • In a particularly good month recently, he pocketed a $30,000 profit.
  • Seven years ago, he was broke, living on a friend's couch. Today, he manages close to 100 Airbnb properties, along with his fleet of Turo cars, sometimes packaging them together.
  • "When you get to a place, the car is waiting for you — it really makes you feel like a VIP," he tells Axios.

Flashback: Turo CEO Andre Haddad saw the same dynamics play out during previous stints at iBazar and eBay.

  • "One of the universal truths of online marketplaces is that they typically start with consumers and then find a way to migrate to small businesses," he tells Axios.
  • Airbnb, for example, started off by letting people rent their couch or spare bedroom to travelers. Now many of its properties are professionally managed.

What to watch: Last month, Turo filed confidentially with the Securities and Exchange Commission for an IPO listing.

The bottom line: Car-sharing in North America is projected to exceed $4.8 billion by the end of 2024, per Graphical Research — good news for entrepreneurs looking to pocket a little extra money.

Editor's note: This post has been updated with the correct spelling of iBazar.

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