If you were able to rent your neighbor’s car over the weekend or rent out your car while you weren’t using it, would you? This isn’t an imaginary scenario but an actual option. Without fanfare, the Turo car-sharing startup has arrived in Israel.
Through San Francisco-based Turo, TheMarker managed to rent a Toyota in Tel Aviv for $78 a day, with a free 300 free kilometers (186 miles), or $295 for five days with 1,200 free kilometers. Beyond that it’s 30 cents per kilometer. Since studies show that private cars are parked 95% of the time, this initiative sounds like an obvious way to make a shekel.
Turo is part of the new shared economy, the Airbnb of cars. It was established in 2009 under the name RelayRides before a name change in 2015. After that it expanded to Canada, Germany and Britain, present mainly in big cities and near airports, where most rentals take place. A special niche in Turo’s business is one-day rentals of prestige cars.
Since its inception, Turo has raised more than $200 million from funds such as Kleiner Perkins, August Capital and Google’s capital venture fund. Last year it completed its fourth capital-raising drive, bringing in $104 million. Turo currently serves 8 million customers across the world, a third of whom joined last year. Renters make an average of $170 per rental, the company says.
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Maya Yitzhaki, whose car TheMarker rented through Turo, said she signed up to make extra money on the side. “My car is idle much of the time and I thought I could make money by renting it. I found Turo online and registered my car a few months ago but no one responded,” she said, adding that TheMarker's reporters were the first people to rent it.
Turo joins a host of international startups using this model that have launched business in Israel, mainly in Tel Aviv. Others include U.S. motorized scooter companies Bird and Lime, which is arriving here soon. Shared bikes are also available, with Chinese company Mobike providing the service. Its competitor Ofo, also Chinese, has withdrawn from Israel, saying it wouldn’t be focusing on the Middle East.
Car2Go has been renting shared cars on demand for years, and has now added the rental of leased cars. AutoTel, meanwhile, is designed for short trips around the city. UberX, operated by private drivers, has been pushed out under pressure from the Transportation Ministry. A shared commercial-vehicle initiative called Via, developed by Israelis, is unavailable here.
Tel Aviv is considered suitable for such experiments because it’s small and flat, and many people are technology-friendly and happy to try new features. But Turo is expected to experience a rough ride because rental prices are relatively low in Israel and so many people are attached to their cars.
“Turo is a success in the United States, with a growing culture of person-to-person rentals similar to the Airbnb model,” said Ayala Tsoref, a lecturer and consultant on shared economics. “Some people have turned Turo into their major source of income. They buy cars and rent them out through the startup,” she added.
“The company will have to educate people who aren’t used to taking strangers into their cars. For many Israelis, their car is a private domain. I imagine that rental companies will adopt similar models, becoming partners instead of competitors.”