‘Amazon has shown the path’: Car-share boss reveals plan for dominance

US platform Turo says it has become Australia’s largest car-sharing marketplace, and despite some road bumps – including a cancelled IPO and involvement in two deadly incidents in the US – its global boss is confident of avoiding the pitfalls that have plagued other sharing economy giants.

Founded in 2009, the online rental platform says since its Australian launch in 2022, it has racked up more than 3000 active car listings locally and has virtually doubled the number of car owners and customers on its platform over the past 12 months.

US-based car sharing marketplace Turo says it has racked up over 3000 active car listings in Australia.Credit: NurPhoto

Unlike traditional car rental companies, Turo does not own or maintain any of its own cars, instead allowing car owners to set their own prices and connect directly to drivers. Turo takes a cut of between 10 and 40 per cent of the rental income.

The company continues to grow but scuppered plans for an initial public offering (IPO) this month – three years after initially filing to go public – in a decision global chief executive Andre Haddad said was due to timing.

While Turo is often described as the Airbnb for cars, Haddad prefers a comparison to Amazon. In an interview, Haddad said it’s Amazon that has provided the blueprint for what he wants to accomplish, in terms of continued growth and superior customer experience.

Turo chief executive Andre Haddad.Credit: Bloomberg

It’s Haddad’s own background, as an executive at e-commerce giant eBay in the 2000s, that he says has made him aware of what can happen when companies fail to capitalise on their momentum.

“In 2005, eBay was the largest internet company in the US, and maybe even the world,” Haddad told this masthead. “I remember it as if it were yesterday, and back then Amazon was struggling, they had been losing a lot of money and folks were not sure if the company was going to survive.”

Amazon’s pivot towards letting third-party merchants sell on its platform effectively killed eBay’s competitive advantage, according to Haddad.

“Today, the third-party merchant part of Amazon is three-quarters of its business,” he said. “They were able to reconcile the power of the platform, with the peer-to-peer model, and deliver a retail-like experience.

“That’s what we want to do. I’m very aware of the issue with some of the marketplace platforms.”

Tim Rossanis, Turo’s Australian managing director, says the brand has resonated strongly in Australia. Credit: AFR

Haddad said Turo allows its customers to book cars instantly, as opposed to Airbnb, for example, which often involves a wait time for bookings and manual host approval. Turo hosts can also specify their minimum and maximum number of days they want their cars to be rented, and each booking has standardised cleaning policies, which can often be a sore point for users of platforms such as Airbnb.

“Previously there was inconsistency, and we’ve eliminated that and replaced it with centralised policies around cancellations, cleaning and return hours,” Haddad said. “We want to take advantage of the power of the incredible entrepreneurs we have as our hosts, but on the other hand, channel that entrepreneurial energy into a consistent guest experience.

“We’re still not done yet, and Amazon has shown the path.”

Turo is amassing a large user base globally: it reported having 150,000 active hosts globally in September, with 350,000 active vehicle listings and 3.5 million active guests.

Ongoing cost-of-living pressures have meant that Australians have been turning to Turo for supplemental income, Haddad said, and the platform was also used by international tourists. Between 20 and 30 per cent of Australian Turo customers are international visitors.

Turo was previously a rival to Uber’s car-share division, but late last year it signed a partnership with the company, so Australian Uber users can rent vehicles from Turo’s collection directly from the Uber app. Uber scrapped its “Uber Carshare” product in September.

Tim Rossanis, a former Uber executive and Turo’s Australian managing director, said the Turo brand had been resonating strongly in Australia.

“Hosts are building businesses because cost of living has become more and more challenging, and cost of car ownership has become progressively worse over the years with interest rates and insurance costs and so on,” he said.

“The cost of life in general has been going up, and so what’s resonated with the thousands of hosts we now have in Australia is that they have he the opportunity to build a business and to really be entrepreneurial in the way that they approach car sharing, and they’re making money.”

There are inherent risks and issues with any sharing economy platform, as the likes of Uber and Airbnb have experienced. The Turo platform was used in two New Year’s Day incidents in the US, by a perpetrator in a Las Vegas Tesla Cybertruck explosion and the terrorist attack in New Orleans that killed 15 people and injured dozens more.

Haddad declined to comment further, but a Turo spokesperson said at the time that the company believed the two individuals would not have been flagged by anyone, including rental car companies or law enforcement.

“These individuals in question had valid driver’s licences, clean background checks, and were honourably discharged from the US military. They could have boarded any plane, checked into a hotel, or rented a car or truck from a traditional vehicle rental chain,” the spokesman said at the time.

The Tesla Cybertruck that exploded outside a Las Vegas hotel on January 1 was rented on Turo.Credit: nna\mikala.theocharous

Turo this month scrapped its plans for an IPO, according to a regulatory filing, and Haddad said in a statement that the board had “decided now is not the right time for Turo to pursue a public offering”.

He told this masthead before that announcement that Turo had been profitable for the past three years and therefore wasn’t in any hurry to go public.

“We’ve got a lot of employees and shareholders who are looking forward to getting liquidity, so it’s definitely part of our future plans,” he said.

Aside from the prospect of a future public listing, Turo will also have to navigate the advent of autonomous vehicles, which could either be a boon or a bust depending on how the company handles the inevitable changes associated with the technology.

“We view autonomy as an opportunity for us,” Haddad said.

“Frankly, we think that personal car ownership will continue to be an important part of how people access mobility. Almost all manufacturers of personal cars are building autonomy within their vehicles.

“Because of the need for private space for longer durations, I think the model that we expect to prevail is personal cars that people buy and share. And that’s where it becomes an opportunity, because then instead of a host having to deliver a car to an airport, they can send the car to pick up the guests.”

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