Turo is one of the newest up and coming startups from Silicon Valley. As they grow larger, they are ruffling quite a few feathers in the rental car industry. As we saw with Uber and local Taxis, startups tend to try to out perform traditional companies by claiming they don’t fall under the same sort of regulations.
Turo offers car-owners an opportunity to make money off cars that might otherwise sit in the driveway. For drivers, they provide a fast, customized way of renting a car. By filling out forms on the app before hand, drivers can get their car right as they walk out of the airport. Turo is trying to make the renting process more efficient while also allowing customers to have any car from a Tesla to a Honda accord. One car owner earned about $1,500/month from renting out his two Audis. While this all seems great for consumers, the rental companies aren’t so pleased.
Since Turo doesn’t own any of the cars they are renting, they claim that they are not a traditional rental company and therefore should not have to follow the regulations set by law. Rental companies, on the other hand, are claiming that ignoring these rules would create extreme danger on the roads as people may not know about recalls or have their safety inspections up to date.
Aside from the rental car companies who will be directly losing business as a result of Turo, airports are also could face a loss. Airports generate huge revenues from selling space for rental car companies to use. Roughly 10% of airports revenue comes from rental companies. With all this lost revenue at risk, members of the American Car Rental Association (ACRA) as well as Transportation authorities from different cities are beginning to take Turo to court and lobbying against them in Congress. The City of San Francisco is personally suing Turo for ignoring the traditional car rental ways and picking up customers at the curb.
Between pending court cases, congressional bills, and cease-and-decist orders, the future is extremely unclear for all relevant parties. With this unexpected new competitor, both airport corporations and rental car companies are going to have to begin to shift their allocation of resources or risk major losses. The rental car companies could face steep holding costs if their cars sit in the lot unused. Airports face losing leases to rental companies that may not be able to afford their rent anymore. Turo may lose all their court cases and face fines as well as increased regulations and restrictions for the government. Will all this uncertainty, planning resources is more important now than ever. Although it may be expensive, changing the master scheduling now will likely serve all these parties better in the long run.