After years of taking a backseat to ride-hailing, the rental car space is heating up.
Turo, a San Francisco-based startup that helps car owners rent out their personal vehicles, today expanded its platform to include “commercial” listings from small rental-car companies in 56 countries. Turo also said it had increased its series D funding to $104 million, from $92 million in September 2017, thanks to investments from American Express Ventures and Sumitomo Corporation, a Japanese conglomerate.
A week earlier, Uber announced plans to launch its own rental car network in partnership with Getaround, another San Francisco-based startup that lets users book vehicles from private car owners. Uber has previously partnered with rental car companies to make vehicles available to ride-hailing drivers. The new Uber Rent platform, scheduled to launch later this month in San Francisco, represents the first time the company has offered rental cars to customers.
The sort of peer-to-peer car rentals that Turo and Getaround offer have yet to become as popular as Uber made getting a ride from a stranger and Airbnb made staying in someone’s home. But the business has recently gained more attention as automakers to ride-hailing companies contemplate a future in which the typical consumer doesn’t own a car, and relies instead on a combination of shared rides, public transit, bicycles, and car rentals. Even Elon Musk has said personal car-sharing will be part of Tesla’s future.
Founded in 2009 and formerly known as RelayRides, Turo has raised $216 million to date. Its series D round was led by German automaker Daimler, which has also invested in shared rides company Via. Turo said it had 6 million signups and 230,000 vehicle listings in four countries as of early April, prior to adding commercial listings. The company hopes having Sumitomo as an investor will help it launch in Japan. Getaround, also founded in 2009, has raised a total of $88 million from investors including Toyota and operates in 10 US cities.
Turo typically takes a 20% cut from private car owners who rent out their vehicles. It provides insurance for car owners and renters through Liberty Mutual, an investor in the series D round. With the new commercial listings, Turo will charge only a 10% fee on the transaction if the boutique rental car companies using its platform provide their own insurance.
Uber had approached Turo about potentially becoming its partner on the Uber Rent platform, but Turo felt the deal wasn’t in line with its business plans and focus on international growth, a person familiar with the talks told Quartz. The ride-hailing company also spoke with Turo last summer about letting Uber drivers rent cars for short periods of time on Turo’s platform. “We looked into it and we didn’t actually think the economics made any sense,” Turo CEO Andre Haddad told Quartz at the time.
Quartz contacted Uber for comment and will update this post.