What a crazy two years it’s been!
In case you haven’t been paying attention, or are new to hosting, let me quickly recap the wild ride that we Turo hosts have endured the past couple of years.
As we closed out 2019 we were continuing to enjoy a gradual but steady adaptation of car sharing across the country, with Turo leading the way, yet struggling to reach profitability as a company. We had all been on a see-saw of policy changes, some benefitting the guest experience at the expense of the host experience, and vice-versa, all while Turo attempted to balance the scales to gain market share away from the traditional car rental companies, with a fleet of vehicles owned by independent hosts. All in all, things were pretty “normal” as the host community gradually grew and many of us considered moderate expansion of our fleets.
We all know what hell was unleashed a few months later with the pandemic. Fleet owners in tourist destinations were devastated as travel came to a halt and the country went into lockdown. Some fleet owners saw just the opposite in daily driver markets and enjoyed 100% utilization when the Uber drivers began staying home and collecting unemployment, with commuters still needing transportation. Turo laid off staff, streamlined, and held on for dear life, unsure of its survival, let alone profitability.
And then 2021 rolled around and took all of our breath away. Travel bans lifted. People who had been caged for a year were on the move in record numbers. And in every city, in nearly every corner of the country, rental cars could not be found, and if they could, they were priced in the hundreds of dollars a day. People even resorted to renting, of all things, Uhaul trucks for their family vacations!
This was our moment as Turo hosts and we all grabbed it and ran with it. The host community exploded. Thousands and thousands of vehicles were added to the platform. In some cities the inventory more than doubled. Over the spring and summer most of us were at 100% utilization, with waiting lists, and charging the highest daily rates we’d ever charged. And Turo, the company, reached profitability for the first time in its history, announced an IPO, and unleashed its largest host acquisition incentive and marketing campaign ever.
As we close out 2021, the euphoria has faded some. The boom has been reduced to a hum. Some of the new hosts have already closed up shop. Many of us have more vehicles sitting on our lots than rolling down the road as we are now all awash in historically high Turo vehicle inventories against a more normal travel pattern. Hosts wanting to acquire vehicles and expand cannot due to the chip shortage, manufacturing crisis, and historically high pre-owned vehicle prices. And hosts wary about the future are tempted to sell what they have for profits they’ll never see again. And again, we’re looking around cautiously, wondering what the future is going to bring.
Get ready for a bumpy ride.
What I’m about to share with you is simply my prediction. Nothing more. And no “inside information” has helped formulate these prognostications.
Let’s begin with auto ownership and shared mobility in general, a broad term that encompasses more than car sharing as we Turo hosts understand it. I believe shared mobility is going to gain traction in the coming year and beyond. Auto ownership as defined by the 20th century will live on in the history books, but not on the highways. Of course people will still own vehicles for a very long time. But we’re finally beginning to enter the era of the Jetsons (sans flight, damnit) where a businessman may tap his phone as he leaves his office and by the time his elevator reaches the ground floor, a roving autonomous vehicle owned by someone else, or a shared mobility company, has arrived to drive him home (with no driver) while he finishes up his work on his laptop.
That scenario is likely several years down the road, yet likely less than a decade. But what about the intervening years between here and there?
Car sharing as we know it is still in its “pioneer” days. We are currently in the “olden times” that the businessman in his roving autonomous vehicle will nostalgically look back on and tell his kids about. And I think we’re about to see a rapid evolution to get us to his reality. Here are some mile markers along the way.
Brick and mortar auto dealerships will disappear across the country and brands will move to an online store and “build on demand” model, with delivery of your new vehicle to your home, like an Amazon package.
Auto brands will introduce subscription business models. A third option alongside of ownership and leasing and, eventually, the subscription model will become the most popular versus ownership of rapidly depreciating assets.
Traditional auto rental companies will evolve to provide better daily driver solutions and customer experiences. Booking an Enterprise vehicle to get back and forth to work for the week will be only a couple of phone taps away before the vehicle arrives at your home Monday morning at 6:00, and is then picked up from your home Friday evening after you’re finished with it.
Car sharing as we know and understand it will continue to grow in popularity and acceptance. But the bar, at which hosts operate, will be continually raised by regulation and consumer expectation.
Here’s how the Turo host experience will evolve.
I’ll preface this next section by repeating, no “inside information” has led me to these conclusions. They are mine and mine alone. And there’s as much chance of me being wrong as there is of me being right. So proceed as you will.
As we hurdle rapidly into the future, toward Mr. Jetson in the autonomous vehicle that he doesn’t own, the standards at which carshare hosts like you and I must operate will be dramatically raised and I see four major factors at work.
The Turo IPO. Once Turo becomes a publicly traded company, presumably in 2022, there will be an added layer of accountability to shareholders and regulators. Some of the liabilities that were permitted to exist in the Turo ecosystem (shady hosts and sketchy vehicles) will no longer be tolerated as they will be recognized as the competitive and liability threats that they are and removed.
Consumer expectations. Though there will always be a “sub-prime” market with low expectations, I believe consumer expectations of convenience, safety, and experience will continue to rise significantly and hosts will need to be prepared to meet those expectations to survive.
Rapidly increasing competition. Today we Turo hosts view entities such as Hertz and Enterprise as our competitors in the carshare space. That will change rapidly, as soon as next year, and our competition will soon involve carshare/membership/subscription models from auto manufacturers, dramatically improved options from the traditional RACs, public transit options we haven’t even imagined yet (think Tesla Tunnels and "smart highway trains”, and new startups who see the future in this space, particularly as autonomous vehicles gain acceptance.
Government regulation and taxation. We’re still operating “in the blind” for the most part when it comes to regulation and taxation. As soon as next year we can expect to see this change, in a significant way, and Turo hobbyists will need to either understand they are operating an actual business and perform on that level, or exit the space.
For a while now I’ve been predicting what I call “The Purge.” With some of the moves I’ve seen Turo make in recent weeks, particularly with the new annual inspection requirement, I believe more than ever this is coming.
In 2022 we’ll begin to see the demise of old, sketchy, dirty, smelly “shooters” from the Turo platform. Cleanliness and safety will factor greatly in a host’s survival. And there will be no tolerance for dishonest hosts who cheat guests (like the one I saw commenting on Facebook just yesterday about how he carries a pack of cigarettes with him at all times so he can plant smoking evidence and charge guests).
Here’s how “The Purge” will unfold, in my opinion.
Vehicles with a pattern of disrupted trips due to mechanical or safety issues will be more aggressively de-listed permanently.
Hosts with less than 80% of their reviews being 5-star will be removed. Turo already looks at this, but I believe they will become more aggressive.
Hosts with a pattern of cancelled trips will be warned, then removed more aggressively.
Inactive vehicles, listed for a certain length of time but with no bookings and cluttering the search results will be removed. This is usually the result of hosts pricing their vehicles too high to ever get booked, but keeping them out there, hoping to get lucky.
Outstanding hosts will rise to the top. Marginal hosts will either rise to the level of outstanding or fall to the bottom. And those already at the bottom will soon leave the platform.
Here’s what I believe the most successful Turo hosts of the future will look like.
They will have vehicles in their inventory on-par with the vehicles one would find at a traditional rental car company. Newer models with the latest safety and tech features. Their vehicles will never be handed off in a condition less than spotless, and never with safety or mechanical issues.
They will run their operation as a business, not a hobby, or even a side hustle that they attend to as time and energy permit. I was once coaching a host who had a pattern of cancelling weekend trips because she was too drunk from partying to serve the customer, and wondered why she was ranking poorly in search results.
They will offer unparalleled service and convenience to the guest with things like expanded and flexible delivery or pickup options and guest amenities.
They will learn and execute self-driven marketing campaigns in their cities to gain market share away from the competition versus relying on a “if you list it they will come” approach.
And, perhaps most importantly, they will operate with an unquestionable business ethic and unparalleled commitment to excellence in every aspect of their business.
For the last several years, we’ve been playing, exploring, and dabbling in this new world of shared mobility.
Those who continue to play, explore, and dabble will be left behind. Those who see this as a new horizon for serious business ownership and treat it as such, will do well and will find ways to evolve as the industry evolves. Things are about to get exciting, and even a little bit weird.
Turo Hosting in 2022 and Beyond
This article is really well written! I’ve been thinking a lot this week about the future of the marketplace.