Turo, Karshare and carsharing in general

[Gavster]

The house always wins...

There's a private Turo event for AllStar hosts which I'm going to next week. I'm planning to lay out all the costs and income to run through it with them.

One of the biggest hosts I know, based in North London (he's got about 7 cars including a Tesla on there) admits that he's not in it for the limited profit, but because he's trying to find investors for his other business - you meet a lot of interesting people when you're renting out cars for £100+ per day. Funnily enough, he's someone that Turo promote in their mailouts.

[Gavster]

Fag pack calculation of the costs for 8 months. At the moment I'm expecting around a £1k loss, depending on what price the car sells for. At best I would have had a free car for 8 months in exchange for my time. With cheaper insurance and running costs, I could easily have been £1k up with a free car.

Overall it's been a very educational journey and taught a lot about customer service, which has been very useful in other parts of my businesses.

[Gavster]

Also, from what I've learned through this car, I could easily turn a profit on a different (more reliable) vehicle, as detailed in my ramblings about Zafiras. When you run the numbers across a lot of different makes and models, a 4-series doesn't have a very good ratio in terms of the initial purchase price vs daily rental price. There are cars that you can get for £8k which rent at the same price per day

[Mito Man]

Will you give it another shot with something like a Zafira?

[drcarlos]

Will you give it another shot with something like a Zafira?

Are they more reliable? Must be a popular rent, but even owning a Vauxhall or two and being a bit biased they are not the most reliable of vehicles. Ideally a Japanese version is where I'd look, Toyota, Honda or even a smaller Lexus if you wanted like for like on a 4 series, not sure if either have a small people carrier in their range at the moment as it's no longer my area (Phew) anymore.

[Jobbo]

The fact that you can't deduct your losses against your income before working out profit is always going to hurt.

[Gavster]

Someone has reached out to me separately and apparently you can claim some capital allowances as a sole trader so my figures might be incorrect - I'll look into that further. I had always been working on the assumption that I could only claim my own business mileage, so hadn't run it past my accountant. Also once the car is sold I'll update as the depreciation is clearly a major factor in the overall profitability. These changes could make a big difference to these initial figures.

I might get another car for the summer, I'll make a decision once the BMW is gone. A lower purchase price, with cheaper insurance and better reliability at roughly the same daily rate could make made a massive difference to the profitability.

[Rich B]

Sounds like a load of ballache (41 pickup, 41 drop offs, however many hours getting the car fixed, sorting quotes, keeping it clean, having to sell a shagged car, etc...) with a load of risk - confirmed by it ending up costing you money. The car-sharing company have done very well out of all your hours of work though.

Fair play for giving it a go, but I wouldn't dream of trying it again.

[Gavster]

Sounds like a load of ballache (41 pickup, 41 drop offs, however many hours getting the car fixed, sorting quotes, keeping it clean, having to sell a shagged car, etc...) with a load of risk - confirmed by it ending up costing you money. The car-sharing company have done very well out of all your hours of work though.

Fair play for giving it a go, but I wouldn't dream of trying it again.

You're incredibly cynical Rich, of course they do well, as I'd hope your bosses do too. Would you prefer to work with unsuccessful businesses?

The main reason to do it again is because of my curiosity about business development and iteration when developing a product or service. I made some suboptimal choices which I've learned from, so am interested to see if my beliefs about how to make it work are correct. It's not a long-term aim, because I don't want to run a car hire business, it's a bit of fun on the side of my other businesses.

With a different vehicle, the potential margins are way better, which would give me a free car + profit in exchange for an hour or so of work each week - which is a time investment I'm willing to take because of one important reason: The car will be earning money while I'm sitting at my desk earning money.

[Rich B]

Sounds like a load of ballache (41 pickup, 41 drop offs, however many hours getting the car fixed, sorting quotes, keeping it clean, having to sell a shagged car, etc...) with a load of risk - confirmed by it ending up costing you money. The car-sharing company have done very well out of all your hours of work though.

Fair play for giving it a go, but I wouldn't dream of trying it again.

You're incredibly cynical Rich, of course they do well, as I'd hope your bosses do too. Would you prefer to work with unsuccessful businesses?

The main reason to do it again is because of my curiosity about business development and iteration when developing a product or service. I made some suboptimal choices which I've learned from, so am interested to see if my beliefs about how to make it work are correct. It's not a long-term aim, because I don't want to run a car hire business, it's a bit of fun on the side of my other businesses.

With a different vehicle, the potential margins are way better, which would give me a free car + profit in exchange for an hour or so of work each week - which is a time investment I'm willing to take because of one important reason: The car will be earning money while I'm sitting at my desk earning money.

very cynical! It just sounds like another Amway, Avon, etc... sell the dream, let the franchisee take all the risk, make them pay all the money upfront, give them no guaranteed earnings and take all the actual profit.

[Gavster]

Rich you have the true mind of an employee and you're comparing different business models. Besides, do you really believe that starting Turo was a zero risk venture for the founders? Of course not, they took an enormous risk. Way bigger than me buying a secondhand asset and of course they should profit more greatly too.

Avon and Amway are renowned MLM schemes where you get paid commission to bring new 'reps' on board and you are then paid commission based on how much of the overarching firm's product you are able to sell. In these firms you are also incentivised to upsell through the commission structure.

On the other hand, Turo doesn't have any MLM commissions, nor are you required to sell their products, you chose what to sell and the fee structure is fixed at 25%. Turo are providing a marketplace for people to sell their own product, whilst providing insurance, customer support, sales and marketing services. Turo's model is exactly the same as AirBnB, eBay, Amazon FBA, UpWork etc, which have proven track records as being very successful business facilitation models.

[Rich B]

I'm not comparing you to the founders of Turo/Airbnb/etc. They've done a great job! They've provided a great platform, and Your hard work has earned them £1250, whilst leaving you £900 out of pocket... And still you're defending them!

[Gavster]

I didn't think you were comparing me to the founders, perhaps you misunderstood my post.

However, your naivety about business shows if your approach is to give up and become resentful when things don't work out first time. There are many factors under my control which influence the profitability, it's not as simple as 'Turo is a racket'. There's a clear distinction between the experience I've gained while hosting on Turo and the financial impact of my first car choice. Once you separate those two activities (experience vs car choice) and then apply the knowledge to a better car choice, the numbers change in a hugely significant way.

Of course, if I decide to put a second car up and it makes a loss too, it'll make your day. But I'm happy to take that risk

[Rich B]

I didn't think you were comparing me to the founders, perhaps you misunderstood my post.

However, your naivety about business shows if your approach is to give up and become resentful when things don't work out first time. There are many factors under my control which influence the profitability, it's not as simple as 'Turo is a racket'. There's a clear distinction between the experience I've gained while hosting on Turo and the financial impact of my first car choice. Once you separate those two activities (experience vs car choice) and then apply the knowledge to a better car choice, the numbers change in a hugely significant way.

Of course, if I decide to put a second car up and it makes a loss too, it'll make your day. But I'm happy to take that risk

You don't need to be all aggressive - I'll happily be proved wrong, I don't want you to lose more money. As I've stated several times - fair play for trying it out (and even more fair play for sharing the outcomes fully).

But it has gone exactly as I'd expect it to go - all the risk, all the hassle, not enough of the profit.

[Gavster]

Lol that's really not aggressive, just facts

[Rich B]

Lol that's really not aggressive, just facts

cool. Keep sharing the details, it's very interesting to read up, even if you aren't interested in anyone else's opinions.

[Gavster]

The fact that you can't deduct your losses against your income before working out profit is always going to hurt.

There's been some good news about tax and the potential profitability of the Turo process

The original assumption about not being eligible for tax deductions was based on the Gov statement that sole traders can only claim simplified mileage costs for vehicles. However, digging around further has suggested that you CAN write down capital purchases between 6% - 18% on vehicles as a sole trader, meaning that my initial assumption about not claiming any costs was wrong and therefore has even further implications on my P&L estimation.

https://www.litrg.org.uk/tax-guides/sel ... a-car-get-

My self-employed accounts are a complete clusterfcuk over this last year due to being delboy on the side of my normal work, I'll get my accountant onto it all this over the summer to get the best out of the situation.

[Gavster]

Car sold for £9820 which puts depreciation at £2030 over 9 months/15k miles. Whilst it's not ideal, the alternative was to put it into the garage for an open wallet set of repairs. Waiting on my accountant to confirm about tax implications.

As for a replacement car, that's gone on hold as I've just landed the biggest contract of my life for my main work which needs my focus over the next month to get started. A new car would need to be listed around the end of June latest ideally, to take advantage of the July/August/Sept peak time.

[Samjp9]

Car sold for £9820 which puts depreciation at £2030 over 9 months/15k miles. Whilst it's not ideal, the alternative was to put it into the garage for an open wallet set of repairs. Waiting on my accountant to confirm about tax implications.

As for a replacement car, that's gone on hold as I've just landed the biggest contract of my life for my main work which needs my focus over the next month to get started. A new car would need to be listed around the end of June latest ideally, to take advantage of the July/August/Sept peak time.

Thanks for all this information, this forum has been a great insight into carsharing as a side hustle.

I currently have a full time job which i spend most my days at home and my weekend free, this carsharing sidehustle would suit my lifestyle i beleive.... but now ive read this forum im having doubts.

So my questions are:

1. have you tried again since April, if so how are you doing ?

2. karshare, Toru or Hiya car?

3. i have a budget of £5000 to buy a low end vehicle to hire, do you reckon its worth doing?

4. i live next to manchester airport with lots of commercial hire car companies, is this a problem?

thanks for the info Gavster hope to hear a response.

[Rich B]

Any chance we can ban the phrase "side hustle" from the forum?!

Welcome Sam though!