Since the start of the summer, the car rental industry has been trying to cope with a massive car shortage. Due to the global semiconductor shortage, auto OEMs cut auto production at the start of the pandemic. But now that the demand for cars has increased and people are commuting, traveling within the country and investing in new vehicles, OEMs are struggling to meet that demand; Semiconductor makers have had to stay afloat one way or another, turning to more commercial electronics orders, which now leaves OEMs dead in the water.
Since car rental companies have also been affected by this shortage and their own COVID crisis of selling fleets of vehicles to generate additional cash flow during the pandemic, peer-to-peer car rental apps peers like Turo have gained mass attention in various states, from Hawaii to Alaska. Bringing tenants familiar concert-style platform technology and the allure of turning a car into passive income for car owners, Turo now faces the challenge of growing its business and proving it can compete with existing rental car models. And if other similarly decentralized services like Uber and Lyft are any indication, it might be difficult to turn a profit.
Carl Anthony, editor of Automoblog & AutoVision News, shared his take on what Turo needs to do to confidently adapt its business model and service to meet the demand on the horizon, and whether their current approach is sustainable or a bubble ready to burst.