Redefining Car Rentals: A Deep Dive into Turo’s Peer-to-Peer Platform

Exploring how Turo is revolutionizing the car rental industry by turning your parked car into cash.

Value Creation: More Than Just Spare Change

Car Owners: Make Money with Your Parked Car

Got a car sitting around? With Turo, you can make money by renting it out. Instead of your car just taking up space, it can help you earn some extra cash. You upload the car, Turo makes the rest.

Renters: Easy, Affordable Choices

Seeking a vehicle for your next trip? Turo gives you many options without breaking the bank. Whether it’s a compact for city travel or a spacious SUV for family excursions, Turo provides flexibility that traditional rentals can’t match. With verified owner profiles and comprehensive insurance coverage, you can select your ideal car confidently, assured of a safe and cost-effective journey.

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Value Capture: Turo’s Financial Engine

Service Fee from Renters

When you book a car on Turo, you pay a trip fee additional to the rental price. This fee varies based on several factors related to the vehicle and the rental’s characteristics. This trip fee goes straight to Turo.

Click to read about Turo’s service fee from renters.

Share from Car Owners

Turo bills car owners with a Marketplace Fee, proportional to the car’s rental price. Additionally, they charge a Value-Added Services Fee for things like getting paid back for any damage to your vehicle.

Extra Features

Turo also offers features like extra insurance or protection plans, for which they make some money.

Illustrative Booking Example

Source: S-1

Scalability: Endless Highways

Turo’s scalability isn’t just about growing bigger; it’s about growing smarter. Their digital-first approach, combined with a business model that adapts well to different markets, positions them well for scalable growth.

Global Reach

Turo has already taken steps in Canada and the UK. This international growth shows that Turo’s business model has the potential to work in different markets, making it scalable.

Digital Platform

Being an online platform gives Turo a vast advantage in scaling quickly. Unlike traditional car rental companies, which need physical locations and fleets, Turo needs a website and an app to enter a new market.

Variety of Cars

Another aspect that aids Turo’s scalability is the sheer variety of cars it can offer. From budget to luxury, Turo can scale horizontally by providing a wide range of vehicles to meet varied consumer demands.

Network Effect

The more users Turo has, the more attractive it becomes to new users. Car owners are more likely to list their vehicles if there are many renters, and renters are more likely to use Turo if there are many cars. This creates a positive cross-side network effect of user-generated growth.


Turo’s use of technology, like data analytics for dynamic pricing and a proprietary risk score for determining trip fees, allows it to manage a growing user base efficiently. This tech-driven approach makes scaling more manageable.

Sustainability: A Smooth Ride or a Rocky Road?


Turo is in a constant race against both traditional car rental companies and emerging peer-to-peer platforms. To outpace these competitors, Turo needs to keep its pricing competitive, enhance its features, and increase its geographical presence. Staying ahead in these areas is critical to ensuring the platform’s longevity and appeal.

Regulatory Hurdles

Navigating the complex tapestry of international and local regulations is a critical aspect of Turo’s sustainability. Adherence to varying laws about car rentals and insurance is not just about legal compliance but also about maintaining a seamless and consistent business model that can flexibly scale across different jurisdictions.

Trust Factor and Disintermediation

Central to Turo’s sustainable edge is the trust it has fostered through a combination of safety features and insurance coverage. These protect car owners and renters, creating a secure transaction environment and reducing the temptation for off-platform deals.

Flexible cancellation and booking policies further entrench this trust by offering users levels of convenience and reassurance, challenging to match in off-platform interactions. Additionally, the wide variety of vehicles and the sense of community through user profiles and reviews, create a robust deterrent against disintermediation.


Turo keeps adding new features, like “Turo Go,” which lets you unlock cars instantly from the app to stay ahead of the competition. Continuous innovation helps keep the user base engaged and attracts new customers, contributing to its sustainability.

Next Mile: The Road Ahead for Turo

Turo is shifting gears in the car rental industry. It’s a win-win for car owners and renters, and its business model is built to last. Challenges? Sure. But Turo’s got the drive to navigate them.


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Student comments on Redefining Car Rentals: A Deep Dive into Turo’s Peer-to-Peer Platform

  1. Hey Carmen, really interesting blog post. I used Turo once for a rental car and like you said it was super easy to find exactly what we needed. I’m curious if you see them expanding into any additional products/offerings to try and create more value for their users and further entrench people on their platform? Since they’re already plugged into the vehicle, I’m wondering if they would add things maintenance monitoring and alerts for owners like oil change reminders or tire rotation notifications. That way you’re always renting a vehicle that’s in good condition to continue to keep trust in the platform high.

  2. Thanks Carmen, this is fascinating. As someone who rents cars often, I’m curious to know if you believe Turo will eventually have to vertically integrate somewhat and have teams of mechanics, etc. ready to service vehicles as they scale? In other words, once they have a large enough number of people on the platform, doesn’t it necessitate a minimum quality guarantee to ensure user retention, limiting the platform’s scalability?

  3. Thanks for sharing, Carmen! I’m curious about the perception of Turo as a brand among their supplier base (those who are renting out their cars) today. While it could be an attractive way to make side money, I have heard stories of people’s cars being more mistreated or even stolen in some cases. How has Turo changed and adapted the way they protect their supplier base over time?

  4. Thanks Carmen! I’ve looked into Turo several times for personal use, and each time, the fees were what ended up making me choose an alternative. The sample illustration you provided was very helpful, and I wouldn’t be surprised if Turo was indeed taking a 50% margin on each rental. In my case, Turo usually had a miles limit (which traditional car rentals didn’t have) that was the dealbreaker, since I only rent cars for long distances; once I factored in everything, it appeared that traditional car rentals were actually cheaper.

    I would be curious in understanding whether Turo’s large fee percentage is justifiable in that it is required for operations, or if they feel like they can take such a margin because they can price match traditional car rentals. If the latter, I would expect there to be an increase in lower cost digital players entering the market, and driving down the fee structures towards something a bit more sustainable.

  5. Thanks Carmen! I have a similar question to David – it perplexes me how Turo can charge so many add-on fees. I can see how maybe they are able to price match traditional car rentals but retain a higher margin than them, since they don’t bear the costs of owning the car assets. But why have other peer to peer rental companies not been able to compete? What is it about Turo’s platform (ease of it, reviews, insurance provisions, or the fact that they were a first mover?) that other companies weren’t able to replicate? Are the network effects so strong that new entrants are bound to fail?

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