Motorists are stuck in traffic on the Gardiner Expressway near Jameson Ave. in Toronto, Ontario Friday February 26/2016. (Photo by Kevin Van Paassen for The Globe and Mail)Kevin Van Paassen/The Globe and Mail
A U.S. company that has adapted the Airbnb Inc. home rental concept for the automobile is expanding into Canada.
San Francisco-based Turo said on Tuesday it is making its first foray outside the United States with a limited launch in Alberta, Ontario and Quebec and plans to eventually go national, although it has to iron out insurance-related issues in the provinces where it it is not yet present.
The company, founded in 2009 as RelayRides, allows car owners to rent out their vehicles to strangers. Turo plays up the notion that owners can make some serious cash – the average active U.S. member makes $600 (U.S.) per month, according to the company – while renters can choose from a panoply of makes and models.
"We like to think of our mission as one aimed at putting the world's one billion cars to better use," chief executive officer Andre Haddad said in an interview Tuesday.
"There are a lot of cars that may at one point in their life cycle be underutilized. That's a lot of economic waste."
The average compact car costs $9,500 (Canadian) per year to maintain, he added. "I see us as a platform to help people get a better return on their asset and turn a cost centre into less of a burdensome cost centre," said Mr. Haddad.
Entering Canada is a logical move because so many Canadians already use Turo in the United States, and Canada is a major car-rental market, said Mr. Haddad, a former eBay senior executive who took over as CEO of Turo from founder Shelby Clark in 2011.
In Canada, Turo has an agreement with Intact Financial Corp. for insurance coverage through its two biggest brands, Intact Insurance and Belairdirect.
Turo said it is working to get the go-ahead in other jurisdictions, besides the three launch provinces, for insurance coverage. Turo members pay no fees and every rental is covered by $2-million in auto liability insurance and 24-hour roadside assistance, the company said.
The rates offered are generally 30-per-cent lower than those available from the legacy car-rental firms, says Turo.
Users and car owners must pass a screening process set up by the company.
The average vehicle rental time in the U.S. is 5.5 days, according to Turo.
Only vehicles that are less than 10 years old and have racked up less than 200,000 kilometres are eligible for listing.
Turo says it operates in over 2,500 cities and 300 airports in North America and has more than one million rental days under its belt.
The privately held company raised $47-million (U.S.) in a Series C funding round last year led by venture capital firm Kleiner Perkins Caufield & Byers. Major investors include Menlo Park, Calif.-based August Capital and Google Ventures.
Turo currently employs about 147 people.