When the mass shutdowns began in March 2020, automakers expected a sharp drop in demand for new cars and began cutting orders. As a result, microchip makers cut production and were unable to meet the growing demand that actually occurred. Rental companies also sold many of their cars because no one was using them. Once things got back to normal, there was a strong demand for rental cars, but very little supply, resulting in prices that are about 75% higher than pre-pandemic prices.
Due to higher prices and lack of supply, car sharing companies have grown in popularity. Car sharing involves renting a car for a short period of time from a private owner, through a third-party rental company. According to Global Market Trends, the size of the carsharing market exceeded USD 2 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of over 24% through 2026. Companies like Turo, Car2go, Zipcar and Getaround gained more users and more car listings because it’s more convenient and affordable for the average user.
2022 statistics on rental cars and car sharing
- There are 15,577 car rental companies in the United States in 2022, an increase of 0.6% from 2021. (ibisworld.com)
- The U.S. car rental industry had global revenue of $28.1 billion in 2021. (autorentalnews.com)
- A recent report shows that rental vehicle inventory levels are at an all-time low. (IHS Markit)
- The average rental car cost in December 2021 was around $81 per day, compared to $46 per day in 2019. (Kayak)
- Thanks to car-sharing services, like Turo, the average cost of renting a car is $72 per day. (automoblog.net)
- Rental cars or rideshares are the top choice for getting around town (78%) and getting to business meetings (72%), while ridesharing (Uber, Lyft, etc.) is used to get around town. going to restaurants and bars (68%) . (autorentalnews.com)
- Minnesota has the highest rental car taxes and fees of any state at 14.2%. (thecentersquare.com)
What is Turo?
Turo is an American peer-to-peer car-sharing company based in San Francisco. The company enables private car owners to rent their vehicles through an online and mobile interface in over 56 countries. It has been called “the Airbnb of the car rental industry” because users can choose from a wide range of cars and customize the rental reservation according to their needs. There is also a direct line of communication between owners and renters via the app where cars are listed.
Vehicle listings on Turo include photos, descriptions of car features, information about owner care services, and owner and lessee ratings. Ratings protect both landlords and tenants from doing business with anyone who may not be trustworthy. In the app, owners can also set their own prices, minimum age, number of kilometers allowed and the amount of gas that must be in the tank on return.
Most personal auto insurance policies don’t cover commercial use, so if you’re listing your vehicle on a car-sharing platform, like Turo, it’s important to make sure you’re covered by the company.
Turo offers different levels of car insurance policies: 60, 75, 80, 85 and 90. Each of these plans comes with standard liability insurance of $750,000 from Travelers. Renters are not required to have their own insurance policy, but are required to purchase a protection plan if they are uninsured.
Read our full Turo car insurance review to learn more about how it works.
The history of carpooling
According to the Transportation Research Council, one of the first car-sharing projects was in Zurich, Switzerland in 1948. This project, based on a timeshare model, attracted people who could not afford to own a car, as car sharing was a much more economical way for them to move. Because this project attracted a lot of attention, more and more car sharing companies began to appear around the world and the industry began to shift to the model used today. Some car-sharing models still work like those early projects, and some have a more personalized model where individuals list their cars for rent.
The future of car sharing
The car-sharing model has proven itself and is growing rapidly in the field. Benefits such as lower age requirements, fewer restrictions and more flexibility make it more appealing to a wider population than traditional rental cars and play an important role in the growth of the industry. Global market trends quotes Data that the carsharing industry is currently valued at over $2 billion and is expected to grow to at least $6.5 billion by 2027.
Some car-sharing app users buy cars just to list them. Around 73% of people who list three or more cars on Turo consider it a small business and have noticed an increase in bookings since the start of 2021. The majority of these users also plan to buy another car to list on the application within the next year.
As gas and insurance costs rise in 2022, car-sharing companies may need to charge more fees to cover these costs, so it will be interesting to see how prices compare to car-sharing agencies. more traditional rentals throughout the year.