Exclusive: Turo looks to Uber's customers for growth
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Turo, a company that does for cars what Airbnb does for homes, needs to be able to tell a growth story if it's going to get its long-delayed IPO off the ground. To that end, it's partnering with Uber, Axios is first to report.
Why it matters: Turo's pandemic-fueled growth of 2020 to 2021 has slowed, which is one reason it still hasn't gone public.
- By listing its broad inventory of privately-owned cars on the Uber Rent, Turo looks to give investors reason to believe there's still a ton of growth in car-sharing that will get earnings headed back in the right direction.
- The deal also allows Uber to quietly fold a competing car-share service that didn't take off.
The big picture: Turo is designed to let people rent their underutilized car to other drivers.
- Originally marketed as a side gig for people to make extra income or to offset their car payment, Turo is also now a small-business platform for entrepreneurs managing multi-vehicle fleets.
- Today, the 13-year-old company lists 364,000 private vehicles for rent, including more than 1,600 makes and models.
Between the lines: Turo's business soared amid a shortage of rental cars during the pandemic, but its growth rate has slowed more recently.
- Revenue grew 417% year-on-year in the second quarter of 2021, vs. about 10.5% in the same period this year.
- EBITDA (earnings before interest, taxes, depreciation and amortization) peaked in the third quarter of 2022, at $29 million. It has been negative in two of the last three quarters.
What they're saying: Turo CEO Andre Haddad tells Axios he still sees a $150 billion market opportunity for car-sharing, citing 1.5 billion underutilized vehicles in the world.
The intrigue: Other startups have tried to peer-to-peer car-sharing, but they haven't been able to scale profitably.
- Getaround was recently delisted from the New York Stock Exchange and pulled out of New York state, citing high insurance costs. Under a new CEO, the company raised $50 million and is trying to regroup.
- Another player, Avail, ended its peer-to-peer car sharing operations, but said it's exploring business-to-business partnerships.
- Uber got into the car-share business last year in Australia after acquiring Car Next Door, but its effort to bring the service to Boston and Toronto was short-lived.
Zoom in: Haddad says Turo has been more successful than others because of its proprietary risk management to ensure high-quality, longer-duration rentals.
- Using 10 years' worth of data about 50 different risk factors, it assigns each trip a Turo Risk Score, which dynamically adjusts trip fees, including security deposits.
- A last-minute rental of a sports car will have higher fees than a minivan booked a month in advance in Florida.
- The lower risk your trip, the less you'll pay.
The bottom line: Turo's listings will be available on Uber Rent in the U.S., U.K., France, Canada and Australia beginning in early 2025. In the meantime, Uber Car Share customers in Australia may list their cars on Turo's site.
- When Turo shares will be available is anyone's guess.
Editors note: This story was corrected to clarify that Uber Car Share customers in Australia may list their cars on Turo's site until the two companies' software is fully integrated in 2025.
