San Francisco based Turo is helping put the world’s billion cars to better use as the leading peer to peer marketplace for vehicle rentals. They are attacking a huge market full of customer frustrations. They are tapping into a massive pool of underutilized assets (our cars). They are delivering a dramatically superior product that is both higher quality and lower price than incumbents’ offerings. And, they are led by a strong team that has delivered extraordinary progress in a short period of time.
For those reasons, we’re pleased to announce that we led an investment in Turo.
Globally, people have invested $20 trillion in today’s fleet of cars: a quickly depreciating asset that is used only 4% of the time. By improving the utilization of existing vehicles, fewer new vehicles will need to be built, an enormous environmental benefit. We already see car ownership declining in key markets as transportation alternatives, such as Uber, continue to grow. As car ownership declines, we see a growing need for a new type of rental car experience where users can get exactly the car they want, when and where they want it.
The average American household spends $9k per year on transportation, which represents 18% of their expenditures. Turo allows any car owner to sell time on their vehicle, turning an underutilized asset into a recurring cash flow stream. This can help owners cover other costs, or enable aspirational purchases of cars that might otherwise be out of reach.
The rental car market is over $65b globally, and it fundamentally does not deliver a great product. The customer experience is mired in paperwork. Pricing is opaque due to fees. And, in the end, the consumer’s choice is limited to “standard”, “economy”, or “premium” beige.
Turo gives a consumer the ability to choose a specific, unique car, owned by a real person, and rated by the many other renters who have used that specific car in the past. A renter can choose a car that actually improves an experience rather than enables an experience: a convertible Jeep for a trip to Hawaii, a Tesla Model S for a weekend getaway, or a yellow Mini just because.
Millennials have shown a growing willingness to turn to P2P alternatives to traditional products and services across categories, whether banking (LendingClub), working (Upwork), or lodging (AirBnB). Millennials now make up the largest generation in the US workforce, creating a strong tailwind for companies like Turo that enable P2P consumption.
Turo is quickly pulling ahead in a winner-take-all market. From the owners’ perspective, Turo has made it incredibly easy to start making money from idled assets by removing a need to install hardware and providing great owner tools like automatic pricing. From a renter’s perspective, Turo has vigilantly curated the marketplace ensuring a high quality car and rental experience. Best of all, we’re confident the team at Turo will continue to expand their lead. Andre Haddad, the CEO, combines deep product passion with sharp analytics and experience in marketplaces, and he’s assembled a strong team to support him.
We are excited to support the Turo team as they deliver on their vision of putting the world’s billion cars to better use.