True story. The other day I was running and I saw a guy vacuuming his car. My immediate reaction was to shout: “Hey there… Turo?” The blankest stare ever… “Turo?” No man…
Why did I assume that his side hustle was Turo?
What is car sharing?
Let me share my story. And if you stick with me to the end, I can expect fewer blank stares.
My story is about cars and personal finance, and how these two passions of mine intersect.
My name’s Justin and professionally I’m involved with personal finance and investing.
My favorite experience this year was attending the best car show on Earth, Concours D’Elegance in Pebble Beach, California. If you’re remotely into cars I highly recommend it.
I’m 31 and call San Francisco home. Turo is my side hustle.
Before we discuss Turo, let’s break down what you can expect from this blog post.
First, I’ll review carsharing and Turo.
Since the ‘proof is in the pudding’ I’ll be entirely transparent and share my financial numbers with you. I’ll break down, in the least boring way I know, how I performed financially last month with my car sharing endeavor.
Lastly, if you’re interested in a side hustle or a passive income stream you’ll want to check out the last bit. I briefly outline how you can get started if this sounds like your jam. Keep reading to find out.
By the way- for motivation, information and carsharing tips I encourage you to visit my website: JustCarShare.com.
I assume that you’re familiar with Airbnb. Substitute homes for cars and that’s Turo.
Turo is the world’s largest peer-to-peer carsharing platform.
What’s that mean?
Pretend for a moment that you’re flying to visit a friend for the weekend and you need wheels.
Sure, you can rent an unexciting car from a rental car company in an inconvenient location. Or you can browse hundreds of cars, SUVs, trucks, and vans listed by ‘hosts’ like me on a carsharing platform with pick-up locations right in your neighborhood.
Notice that Turo doesn’t actually own vehicles. They simply operate the platform: the technology, messaging, insurance, disputes, payments, and so on.
So where do the vehicles come from? From car share hosts like myself.
After a quick and painless background check and driver verification, you’re prompted to select or waive insurance.
Once the reservation begins your car’s location is made available and you’ll use the Turo mobile app to start the car remotely.
Once the trip is completed you’ll refuel, park, leave the keys in the car, and check-out.
3 reasons why people rent cars on Turo versus rental car agencies:
- Selection – from exotics to economy and everything in between
- Character – each vehicle is hosted by a car sharing entrepreneur and has a personal touch. Support their side-hustle.
- Convenience – pick up the vehicle that’s convenient for you. Better yet, have it delivered to you.
From the host perspective it’s worth highlighting these main points:
- You control your vehicle’s availability and calendar
- You set prices and mileage limits
- Turo provides insurance (via Liberty Mutual at $1M coverage, no deductible)
- Turo keeps roughly 30% (depending on the coverage plan)
SHOW ME THE NUMBERS
Now is when the rubber meets the road. You’re probably wondering if car sharing can be profitable.
I can’t speak for everyone, but in my case, yes. It’s been a decent passive income stream.
I’M NOT A LAWYER DISCLOSURE: Keep in mind these numbers are based on my own experience. Your situation will inevitably vary from mine. Past performance does not predict future results.
In August 2019 I earned $2,035 net after $518 in expenses. I hosted two vehicles on the platform:
- 2018 Ford Mustang Convertible – full-time
- 2016 BMW X5 – part-time, mostly weekends
My utilization rate, or how often my Mustang was reserved, was 81%. In other words, the Mustang was on the road generating cash flow for 25 days in August. Not bad.
The Mustang’s average price was just under $70/day. Just so you know, pricing and strategy is an important topic that warrants an entirely separate blog post.
My major expenses:
- Insurance (private car insurance, NOT carsharing coverage)
- Parking tickets (I thought I fed the meter…)
- Cleaning (car wash subscription)
- Automation software (to streamline the business)
- Car maintenance (windshield wiper fluid)
It’s definitely worth pointing out that I’m not accounting for depreciation in these numbers. I’m representing good ol’ cash-in and cash-out.
I do have a spreadsheet that considers deprecation and everything else when contemplating the ‘Should I do Turo or Not’ question.
If you want a deeper dive into the financials or strategy I’m happy to schedule a call.
READY, SET, GO: START CAR SHARING
How did I start?
In the beginning, I hosted my primary driver on the weekends to get a feel for car sharing. Sure, at first it was difficult lending my BMX X5 to strangers. But then I realized it wasn’t so bad. The side income wasn’t bad, either.
From my experience, there are three reasons to start car sharing:
- Pure profit or side-hustle focus
- To reduce car ownership costs
- A blend of both
Here are my recommendations if you’re considering car sharing:
- Learn Turo’s policies for hosting (Turo Support). Know the maximum amount of miles a car can have to be listed. Know how the claims process works (accidents happen).
- Get involved in the community. Join the Facebook Groups, Reddit forums, local meet-ups, blogs (like mine perhaps) and network with other car share hosts. Be warned that there’s a lot of negativity in some of these online communities so take it with a grain of salt.
- Brainstorm which vehicles should perform in your market. Or simply list your vehicle as I did. The Turo Carculator is a good starting point. I feel it’s conservative so take it with a grain of salt. Additionally, certain vehicles require more of your time than others so consider that.
Like most marketplaces, the game is providing excellent customer service. You want to ‘WOW’ your guests so that you receive as many 5-star reviews as possible. More reviews mean additional reservations and, if you’re good, a price premium over the competition.
So how much will Turo cut into your ‘Netflix and Chill’ time?
It’s hard to say exactly but I estimate my total Turo side hustle time to be about 10 hours per month. Most of that time is spent cleaning cars before the next reservation. Turo’s policy states that guests are required to return the vehicle in the original condition. Usually, it’s just light cleaning.
THAT’S A WRAP
Was this helpful? Maybe the next time I’m running I won’t get blank stares when I ask others about Turo.
I encourage you to consider Turo as a side-hustle. Consider viewing your vehicle as a cash-generating asset. Wouldn’t it be nice to offset your car or insurance payments?
If I can help or answer any questions please get in touch. Thanks.