Turo IPO, an overview

Turo is a peer-to-peer car-sharing platform that allows individuals to rent out their personal vehicles to others. Often described as the “Airbnb for cars,” it connects car owners with people looking to rent a vehicle, offering a wide range of options from everyday cars to luxury and unique models. Founded in 2010, Turo operates primarily in the U.S., Canada, and several European countries, making it an alternative to traditional car rental services. The platform provides flexibility for both owners and renters, with owners earning income from their vehicles when they’re not in use, while renters gain access to a wider variety of vehicles, often at more competitive rates. Turo handles insurance and roadside assistance, offering peace of mind to both parties. Through its app and website, users can easily browse and book vehicles, making it a convenient and user-friendly service for those looking to rent cars. For more on a potential Turo IPO, see below.

Who is Turo’s competition?

Turo’s competitors primarily come from the peer-to-peer car-sharing and traditional car rental industries. In the peer-to-peer space, companies like Getaround and HyreCar offer similar services, allowing individuals to rent their personal vehicles to others. Getaround operates in a similar way to Turo, offering short-term and long-term rentals, while HyreCar focuses more on providing vehicles to rideshare drivers for platforms like Uber and Lyft.

From the traditional car rental industry, companies such as Enterprise, Hertz, Avis, and Budget are key competitors, though they follow a different business model, maintaining their own fleets of vehicles rather than relying on individual car owners. In some markets, services like Zipcar, which offers car-sharing by the hour or day, also pose competition, especially for customers looking for short-term, on-demand rentals. Additionally, ride-hailing services like Uber and Lyft, while not direct competitors in car-sharing, offer an alternative to renting a car for transportation needs, making them part of the broader competitive landscape.

Turo Competitive Advantage

Turo’s competitive advantage lies in its peer-to-peer car-sharing model, which differentiates it from traditional car rental companies. By allowing individuals to rent out their personal vehicles, Turo offers a much wider variety of cars, from budget options to luxury and specialty vehicles, providing renters with more choices than conventional rental agencies can typically offer. This diversity, combined with often lower rental rates compared to traditional companies, makes Turo appealing to a broader range of customers.

Additionally, Turo’s flexible rental durations—from a few hours to several weeks—give users more options for customizing their rentals. Car owners also benefit from the ability to generate passive income from vehicles that might otherwise be sitting idle. Turo handles the logistics of insurance and roadside assistance, reducing the hassle for both owners and renters.

Turo’s platform, which is user-friendly and app-based, further enhances its appeal. It simplifies the rental process by allowing users to search, book, and communicate directly with car owners, often offering a more personalized and convenient experience than traditional car rental services. This combination of flexibility, variety, affordability, and convenience strengthens Turo’s competitive position in the market.

Turo IPO?

Performance issues may be hindering Turo’s go at an IPO. In a March 8, 2024 article by Alex Wilhelm for TechCrunch entitled “Profitable car rental service Turo is still ready for an IPO, but its growth cratered in 2023” the author laid out where the company is at.

“Turo, the venture-backed, peer-to-peer car rental service, reported its fourth-quarter and full-year financial performance this week in an updated IPO filing. The company first filed an S-1 to go public in early 2022, later updating the document quarterly in preparation for an eventual offering. TechCrunch covers its regular financial disclosures as they provide insight into when a deeply funded startup with a historical billion-dollar valuation will decide to finally pull the trigger and list its shares publicly.

Is the company’s recent performance hindering the potential for an IPO? Wilhelm addressed that in the article.

“Turo posted revenues of $879.8 million last year, up 18% compared to the year before. The company’s total revenue scale is impressive, but its growth rate has dramatically declined in the last two years. In 2021 Turo’s growth rebounded from 2020’s pandemic-driven woes impressively, rising 213% that year to $469 million. However, triple-digit growth was short-lived at the car rental company, which saw its revenue growth slow to 59% in 2022 when it recorded $746.6 million worth of total revenue. While Turo’s year-over-year growth rate cratered in recent years, it did have a small mote of good news for investors in its new filing,” he noted. “TechCrunch calculates that its Q3 2022 to Q3 2023 growth rate was 13.6%, while its Q4 to Q4 growth over the same time frame was a slightly sharper at 14.3%. While both figures are under its full-year growth rate, seeing its revenue growth perk up even slightly in the fourth quarter could help it argue to public-market investors that its deceleration is not necessarily irreversible.”