Introduction:
As of September 2017, peer to peer car sharing platform
Turo raised an additional USD 92 Million from its investors completing their
series D round of funding. The company utilizes a business model of peer to peer
matchmaking by providing a platform for
users with vehicles to list their own cars on the platform to make money to
meet customers looking to rent a car for a short or a long period of time. This
trend is gaining traction as Car
Rental Industry Market Research reveals that the cost of owning and
maintaining a car has increased significantly. Turo is accompanied by companies
like Hyrecar, Hiyacar and Getaround to provide feasible solutions for car
rentals at reasonable rates via their mobile application / web based platform
which uses a matchmaking software to connect customers with car owners, the
application allows customers to co ordinate the pickup and drop portion of the
vehicle delivery so they can decide on a time and location that is convenient
for them. Turo also provides added insurance for the vehicles and every car is
vetted before listing and the information exchange works simply by customers
and vehicle owners sending digital copies of their identity information and
vehicle information needed. The emergence of applications like Turo is changing
the short term car rental industry for the better but is simultaneously hurting
the business for traditional car rental firms
Market
Threat: The global car rental market is poised to
grow significantly from its value of about USD 56 Billion in 2016 to over USD
124 Billion by 2022 with a CAGR of about 13% for the period. While this growth
outpaces a majority of industries, there is major scope for expansion being
hindered through the introduction of peer to peer car rental. Peer to peer car rental makes a majority of the
approximately USD 5 Billion car sharing market which is forecasted to grow to
over USD 11 Billion by 2024 with a CAGR of over 20% for the period 2017-2024.
This signals a major threat for the car rental market as short term car rental
is expected to be soon replaced by peer to peer based car sharing platforms. The average
annual cost of maintaining and servicing a car is approximately USD 8,609. The
added expenses for fuel which is volatile based on constantly changing fuel
prices has been demotivating consumers from purchasing vehicles of their own. An increasing number of consumers prefer to
avail car sharing services for short and long term rentals and the reasoning is
evident. Recent research indicates that in the U.S, using car sharing services
saves consumers anywhere between USD 145- 435 per month. The added benefit
being that comparative to a rental car company, Turo provides users with
insurance for their rental cars which is not standard in traditional rental car
companies and moreover, Turo costs approximately USD 52 lesser than traditional
providers on a monthly basis. Another major factor in the increasing popularity
of applications like Turo is the variety, as Turo allows owners to list any car
of theirs and also helps aspiring customers purchase a new car there is a much
larger selection of vehicles when compared to a traditional rental car company
which usually handles only a handful of models. Turo lists cars from the 2016
Ford Mustang to a 2018 Porsche Carrera. A similar range of benefits is observed
in companies like Zipcar and HeyCar, although not all the companies provide the
wide range of vehicles compared to Turo
Conclusion:
The traditional car rental business model is in danger
of being replaced by peer to peer models which reduce the operating costs for
businesses making a majority of their costs variable and changing the business
model to be light on fixed assets. Another major factor influencing the growth
of the online platform based model as opposed to traditional rental companies
is the level of convenience that is brought about by using technology based
platforms and although companies like Enterprise are lobbying for there to be
strict regulations imposed on Turo similar to traditional rental car companies,
the satisfaction of the customers is significantly higher through apps like
Turo and Zipcar and that is even without tight regulations ensuring high
quality stands. Turo is effectively changing the rental car industry in the
same way Uber changed the taxi industry by increasing the size of the market
but by running taxis out of business due to lower prices and better customer
service and experience .
For
more information, click on the link below:
Contact
Us:-
Ken Research
Ankur Gupta, Head
Marketing & Communications
0124-4230204
What rental car companies rent to under 21 drivers in the United States?
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National, Thrifty, Avis, Hertz, Payless, Advantage, Alamo, Enterprise, Dollar, Budget and NU are those providers who are supportive of young drivers. Especially for you, we have listed all American under 21 car rental companies with their customer ratings See more here: cheapest car rental for under 21 .
ReplyDeleteA heartfelt thanks to the author for their insightful blog on the threat of peer-to-peer car rental to traditional companies. I offer self-drive cars in Hyderabad, revolutionizing travel convenience and options.