Last week we had the pleasure of meeting and chatting during the WebSummit in Lisbon with André Hadad, CEO of Turo. Described by many as the ‘airbnb’ of cars, Turo is a very successful platform that allows people to share their own cars when they are not using them. The company, have more than 4 million users and 170,000 vehicles in the platform. But let’s André explain us a bit more about Turo in this interesting interview:
Why did you start Huro? What made you think this idea could work?
I’ve personally been in the internet space for the last 20 years, I started my own company in europe in the late 90’s it was the very first online ecommerce marketplace that connected buyers and sellers. We started in france and we launched in many other countries including Spain a company called iBazar and I saw that the notion of connecting people around buying and selling things was incredibly powerful. It created a whole new market in able all kinds of new connections between people and i’m also a car enthusiastic.
I love cars and I have many cars and thinking about the marketplace and car ownership it was very clear to me that there was a real opportunity to combine the two and to create a lot of value for people who own cars and who are not using them and share them with others. Turning the car from liability of owning a car -that cost you money- into an asset that can pay for itself.
So I met with Shelby Clark the founder of the company in 2010 (I meet in 2011) and he has already started on Turo and we really had a great fit talking together as people who were really passionate about bringing this idea to the market and I dray in Shalby in 2011, and I become the ceo the company on September, 2011
We continue to this day with the same mission, which has been the mission of the company from the very beginning which is to put the world 1.2 billion cars to better use, 1.2 billion! Last year an additional 75 million cars that were added so its a huge opportunity, it’s also a huge waist.
When you think about the future of our cities, when you think about the future of transportation, it really doesn’t make sense to have so many cars own individually by people and I think over the last few years, many people around the world have become more accepting of the idea that the future of cars is not necessarily the personally own vehicle it may will be the shared vehicle because it just makes much more sense economically.
And obviously we have been out now for many years, it’s been more than 7 years, and now I think we have a lot of data that shows that it makes much more sense to share. Our host are earning a lot of money with their cars. Last year the average host earn 625 dollars per month by sharing their car raftly ten days a month.
So by sharing your car a third of the time which is not a lot, you can actually make enough money to pay for all of your key operational cost (loan, insurance, parking cost, etc) and we know that all this cars keep on going up and so just makes more sense to share your car rather that just own it.
Traditionally, the car has always been one of our most valued possession. Did you except this great acceptance in the public to share their cars? Did you thought it was going to be harder for people to share their cars with complete extranges?
I dont think is going to be for everyone. I think there is going to be more people driving shared vehicles than people sharing their own vehicles. Like in every marketplace, the majority of the users tend to be consumers rather than sellers or host but we still think that there will be millions of people who will be sharing their vehicles.
We see in the 25-34 age group, a lot of openness for sharing and we think that jounger people, the new generation are less materialistic. They are less about owning to be happy and more about having memorable experiences and deep relationships, great jobs, having more important things in life than just buying and accumulating and owning.
So this new generation is pushing towards that and I think over time more and more people will be more open to share. Including older people who will see that hey this is actually ok! It’s not a weird thing to do.
Will this slow expansion in Europe? Because there is a lot of tradition of sharing in Europe in general and you might thought that it’s easier to make here people share their vehicles, so why don’t expand in Europe?
Building a peer to peer carsharing business is actually quite capital intensive because you are building both sides of the marketplace; you want to build you supply side, your demand side and that requires a lot of efforts on the team side, a lot of marketing expending to build the brand and build the usage experience.
There is also a lot effort to expend on making the marketplace safe and properly ensuring the marketplace so we as a company end up expending a lot of money to provide a great insurance coverage for our host and our guest and that’s definitely a big barrier to entry. Because you need to convince your insurance partner to provide you with that insurance coverage.
We think it’s very important for us to provide great coverage because things can go wrong, a car can be in a accident, etc We do a lot of effort of with people behind the scenes, and we spend a lot of money and investment on insurance coverage, road assistance in case there is any trouble with the car…
So that requires a lot of capital and I think that it’s hard to build a peer to peer carsharing if you haven’t been able to raise a lot of capital and we are lucky in the US that the market is so huge that when you raise capital and you build the product for the whole country you have 350 million potential users.
But I think in Europe remain so much challenging to expand with one product across all Europe because you have different languages, different payment methods, different insurance, laws, different ways of thinking about the sharing experience…
So as a result it’s harder for a peer to peer carsharing business to emerge in Europe than it is in the US. So we want to first build the business in the US and reach some scale before we could expand in to Europe.
But I’m particularly excited about expanding here because I’ve already built companies in Europa and I feel very comfortable being back here. So we are hoping that over the next two years we will have our product available in european countries.
We’ve launched two markets in Europe this years; in Germany in January 2018 and in United Kingdom in September 2018 so I hope for the next two years we will be able to be in Spain and in Portugal and other markets in Europe as we.
Have you consider collect information and data from your users and share it the automakers? Because you have the opportunity to have a lot of different tastes for vehicles and get a lot of insights.
We have great relations with many OEM’s including Daimler (which is one of the investors at Turo). We recently announced a new partnership with Porsche in the US and we have other great relationships with the OEM ecosystem.
The manufacturers are really intrigued about the raise of carsharing. Some of them have invested in their own fleet base carsharing business, many have host new mobility solutions that are emerging around the world.
One of the things that intrigue the auto manufactures in Ture is precisely the point that you are making which is the better understanding of what people love in their cars, better understanding the economics of a car on Turo, and being able to connect with people who are really passion about the brand and who are interesting in trying the new models, people who are potentially interesting in buying that car and are using Turo to do an extended test drive for the car…
So those are the things that we are exploring with many of the manufactures. We will be announcing a bit later this year some really interesting data that we will be sharing with our community that will be very useful for car manufactures around the economics of different cars in Turo. So stay tuned for that announcement!
Do you think Turo is anticipating the future on providing autonomous vehicles on demand? How far is it?
We are very excited about autonomy. We think that autonomy technology is going to help people share their cars more easily because when the car is intelligent, when it’s connected, when it knows where it’s going, when shares a lot of its data that is critical for its functioning (like the battery charge, the fuel, the location)…All of this things come together with autonomy we think that, by definition, autonomous care are going to be very easy to share.
So we view the investment in autonomous vehicles as future livers for growth for us because autonomous vehicles are going to be a lot more easy to share. So you know how easy is going to be to share the car for both parts.
We think over the next few years autonomy technology is going to be mainly available for taxi type fleets or shute fleets. But we don’t see it necessarily available for the mass market in the next 2-3 years but hopefully over the next five to ten years we will see those technologies available to all the car owners out there.
Tesla in the US is probably the most advanced player in this field and it’s not surprise that we have the highest concentration on Turo of Tesla vehicles because the owner of this Tesla vehicles find sharing their Tesla a lot easier. Because the Model 3 doesn’t even have a key any more!
Is much easier to share your Tesla because it’s much more connected car, more electronically advance car. You can unlock your car with you app instead of provide the key in person. There is no more physical key for the Model 3 so Tesla sharing is an early indicator of what autonomous vehicle sharing is going to be on Turo. So we expect it to be a dominant part of the platform over the next years.