Turo Hosting - The Way It Was, The Way It Will Be

We just bounced into a new year and we’re all looking back at how our businesses did in 2022 and wondering how they’ll do in 2023.

You may have mixed feelings.

If you began your Turo business in 2021, particularly early in the year, there’s a chance 2022 was a bit of a disappointment, you’re second-guessing your decision, and wondering if you should keep going. In fact, we’re seeing every day hosts shutting down and selling off the fleets they purchased in 2021. Let’s talk about that.

2021 was not a normal year.

That was the year of the great nationwide rental car shortage and the global vehicle manufacturing breakdown.

People needing rental cars simply couldn’t find them at traditional rental car companies, and if they could, they were paying crazy rates, like hundreds of dollars a day for an economy daily driver. People even resorted to renting U-Haul trucks just to have four wheels and an engine.

Turo hosts saw our best year in history. We were sold out, a lot, at the highest rates we’ve ever charged. As a result, Turo was seen by many as a “gold rush” with pots of gold at the end of every highway.

2022 was a year of correction.

We kind of got back to normal in 2022. Booking activity returned to what most of us saw in 2019. Rates adjusted back to normal levels. We likely made less money on same-vehicle earnings. And hosts looking for those pots of gold ended up disappointed, and many aren't in the business anymore.

But, those of us who’ve been around for several years understood that 2021 was an anomaly and now, it was business as usual.

What will 2023 bring?

Hell, I don’t know. But I can make some pretty educated guesses, and I think it will be a volatile year, with some good, and some bad.

On the negative side, I see a couple of things on the horizon.

I believe we’ll see increased competition. Rental car companies are fleeting back up and will likely change their business models to be more competitive. Have you seen the Sixt commercials? Uber has gotten into the car sharing game. And I think we’ll also see increased competition from smaller players like Zipcar. Car brands will be rolling out subscription plans that will compete with us as well.

On another front, I think 2023 will be the year of a massive vehicle value correction. Vehicles have been overpriced for almost two years. That bubble is already bursting. Now, this is good news for hosts who plan to buy vehicles in 2023, but it also means that all of us who bought vehicles in 2022 will take a massive market correction depreciation hit, and if we financed, we’ll be upside down. If you’re planning to exit and sell your vehicles, I recommend you do it sooner, rather than later.

On the positive side, we’re still on the cusp of a Turo IPO which may happen in 2023. I think Turo will significantly increase their nationwide marketing spend and partnerships with entities like Kayak, Expedia, and credit card companies. This will be great for business, great for you and me!

To sum it up, buckle up Buttercup!

This year is going to be rocky and only the strong, savvy businesspeople among us, who run 5-star businesses, will thrive.