Entrepreneurs Aim to Create Airbnb of Rental Cars
BY PYMNTS | JULY 23, 2023
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Can small-scale rental car entrepreneurs take on giants like Hertz and Avis Budget?
That’s what a group of these do-it-yourselfers aim to do, according to a report Saturday (July 22) by the Wall Street Journal (WSJ).
According to the report, these businesses are putting together vehicle fleets to rent out via car-sharing companies like Turo and Getaround.
However, their efforts aren’t without challenges. One owner told the WSJ he had to travel to Canada to recover a stolen and abandoned car. Another rented a car involved in a shooting, and another had a Maserati totaled when a customer collided with a wall.
“It can be tough if you don’t know what you’re doing,” said Jerome Mends-Cole, who rents out more than a dozen Teslas via Turo and his own website. “People look at it as a get rich quick thing, or a set it and forget it.”
It can easily become a money-losing venture, per the report, as the cost of parking, repairing, maintaining, financing and insuring vehicles can quickly swallow up revenues.
According to the report, around 70% of Getaround’s active cars are rented out by “power hosts” — people who own three cars or more. Many of those rent out hundreds, and at least one has more than a thousand.
PYMNTS spoke with Getaround founder and CEO Sam Zaid last month, soon after his company acquired fellow car-sharing company Hyrecar.
He said the rise of the sharing economy and increased trust and familiarity with marketplace models could help monetize cars when they aren’t in use.
Marketplaces “do really well” in areas where assets are indeed underutilized, Zaid said, using Airbnb as an example. And with the price of cars reaching levels of relative unaffordability not seen in decades, there’s a growing trend not to buy autos — but to share them.
Roughly a quarter of people who share their car end up becoming entrepreneurs on the marketplace, he added, building up small fleets of cars — beginning with a couple and eventually owning and sharing as many as 10 or more vehicles across the platform.
“It becomes what they do full-time,” said Zaid, as some owners can make several thousands of dollars each year per vehicle.
Zaid added that Getaround’s ultimate mission is to let users earn additional income and free themselves from car ownership’s burdens while positively impacting the environment.
Beyond letting consumers book cars for their personal use, he said, Getaround also has an integrated partnership in place with Uber, where a driver can rent an Uber-eligible car on the Getaround platform that’s synchronized with the Uber app and start driving for Uber within minutes rather than having to use their own cars.
