The evolution of Car Sharing platforms has been fascinating to watch over the last few years. I remember seeing an ad on Instagram for Turo. A college kid was posing in front of his corvette so obviously I clicked on the article.
He had 5 rentals and the article went through all the questions I had. I didn’t have any money to buy a car and rent it out, but the idea stuck with me.
My personal experience
A few years ago, a friend and I entered into a partnership to share his vehicle as a rental. It was a 2015 Mercedes Sprinter van with 12 seats and two beds in the back. An absolute beauty.
Things went pretty smoothly. I managed the entire listing process, meeting with renters, responding to messages on the apps, dealing with delivery and drop off, and coordinating the schedule.
We had it listed on Outdoorsy, RVshare, RVezy, and Turo. The majority of rentals came from Outdoorsy in the summer and Turo in the winter.
Revenue was pretty solid. It cash flowed itself, covering the debt service and maintenance costs. Rentals were pretty seasonal, but the ski season helped even things out in January.
Is it worth it?
This is tough to answer. While the vehicle cash flowed itself and built equity in an awesome asset, it took a ton of work to get it ready and out for a rental.
Cleaning was always top of mind. Keeping it in like new condition is so important to the renters’ experience and to the value of the vehicle.
Response rates impact search rankings and trust with renters. Keeping your phone nearby to answer questions and approve trips is an underestimated challenge. You must be “on” all the time.
Constantly stressing that something will go wrong takes a lot of mental energy. I had a renter return the vehicle with a nearly flat tire, right in the airport departure drop off. It took 3 hours on a Sunday night to get a tow truck out to pick it up and take it to the tire shop.
How to make it as efficient as possible.
Proximity to a major airport. This makes it so much more worth it to renters because they can fly in, pick it up and be on their way, then drop it off and get on their flight. A downside is I found myself taking public transportation home a lot. It would eat up nearly half my day to do an airport dropoff or pickup.
Obsessive tracking skills. There are SO many things to keep track of. Every trip must have photos attached detailing damage to the interior and exterior. You really have to know the vehicle like the back of your hand. Tracking mileage of each trip is crucial. There are trip limits and opportunities for increased revenue.
Maintenance also needs to be tracked religiously. For insurance purposes, all rental platforms required regular quarterly maintenance and inspections to ensure it would be safe for all renters. Any mechanical experience is a huge help.
Why did I stop doing it?
It became very difficult to scale like I wanted to. I explored opening a property management company where I would manage other people’s listings for them.
I found it very difficult to get past the liability aspect of it. There were a lot of gray areas as far as insurance was concerned that I didn’t have the knowledge and/or ability to work around.
I also was working on this from 2020-2021 when car prices were sky high. I really wanted to scale up and buy more vehicles, however I just couldn’t make it pencil out.
Now that prices are starting to get more reasonable, I think there is more opportunity to get back into car sharing.
There is still an opportunity here, I just wasn’t able to seize it at the time.
If I could go back how would I do it now?
Looking back, I think there is an awesome opportunity in building these rigs and renting multiple out at the same time under a brand. I would do the following steps:
Find an investor to put in $60,000.
Buy a brand new van(probably a Ford Transit for $45,000).
Add on accessories like a roof rack and ladder, rooftop tent, bed in the back, outdoor shower, ceiling fan, and a slide out kitchenette($10,000).
Go to a bank and refinance the van with an RV Loan over 15 years.
Return investor’s capital and rent it out giving them 5% of all rental revenue until the van is sold.
After 30,000 miles(2 years) sell the van and pay off the debt, pocketing the difference.
Rinse and Repeat.
Economies of scale are interesting with this business. Managing 2 vehicles would not be that different from managing 1. It would be easy to duplicate processes for multiple vehicles.
If anyone wants to do this leave a comment and I’d love to make some intros and see if we can get this thing off the ground.
Take 2 seconds to click a link and give feedback on this post.
With your feedback, we can improve the newsletter. Click on a link to vote: