Things to Note Before Developing a Turo-like App

Understanding the car rental business model

Before developing the car rental app, know what is peer-to-peer (P2P) car rental model is.

Here’s a quick definition of “peer-to-peer car rental.”

It is a business model where car owners rent out their vehicles to renters via an online platform.

This model leverages a digital platform to connect vehicle owners with renters. And the admin who manages the platform earns money through the commission.

Compared to traditional car rentals, it is cost-effective for the renters.

Research the market

Let’s not forget the foundation, which is understanding the market.

It combines the market demand, target audience, and competition better.

Let’s go one by one.

Target audience

Here, your target audiences are renters and car owners.

To identify and understand your target audience, segment the market based on demographic factors (age, income, profession), geographic location, and behavioral traits.

Competitors

Businesses like yours exist, and they are your competitors.

By thoroughly understanding their strengths, weaknesses, market share, and business models, you can understand how they attract and retain users.

Next, check their ‘pricing’ aspects. The effect of seeing how they charge different users impacts your pricing strategy.

If they charge higher commissions or fees, an affordable alternative can redirect their attention to your business.

Location

If you’re unsure about choosing a location, assess the demand for car rentals in various regions, whether local, national, or international.

Different locations have different levels of demand, influenced by factors such as tourism, urban density, and local transportation infrastructure.

And decide where you’ll operate.

Legal and regulatory requirements

It’s no wonder you go through a maze of legal and regulatory challenges.

With the provided list below, make sure you comply with all local, state, and national regulations.

Insurance coverage

A comprehensive insurance plan is essential for both car owners and renters. Turo, for example, offers several insurance plans to protect both parties in case of accidents.

By partnering with insurance companies, you can offer affordable yet comprehensive plans to your users.

Licensing and permits

The licenses and permits needed for your business will depend on your location.

Keep in mind that regulations, too, can vary widely from one country or state to another, so it's essential to understand the specific requirements for your area.

Safety standards

Implement checks to verify the condition of cars listed on your platform. This ensures that the renters are getting better cars.

Inspect the car regularly to maintain quality standards and provide a better rental experience for users.

Develop a unique value proposition

How can you persuade your audience's attention? Offering a unique value proposition (UVP) will do.

This is how you can differentiate yourself from competitors.

Niche markets

Maybe you’re not meant to take the same path as Turo.

For instance, if you offer the same thing as Turo, you are following the path of Turo. Instead, you narrow down the audience segment, catering to different segments, and specialize the platform to serve that user, then, you’re taking a different path.

Some inspiration for you to follow different paths,

Target the customers looking for “high-end vehicles” for special occasions or luxury experiences.
Target environmentally conscious consumers by promoting a fleet of “electric or hybrid cars.”
Target car enthusiasts or customers looking for “unique, retro experiences.”
Include options like SUVs, trucks, or campers for outdoor trips, road trips, or off-road adventures.

Pricing strategy

Subscription models

Implementing a subscription model encourages users to travel with your business for a long time, as they are paying monthly or yearly subscriptions.

However, the real deal is to make the user subscribe to your plans. How?

They should get something out of the plan; I mean, the real benefits. That’s how you make them pay.

Without benefits, your subscription plan is just another plan.

Besides, implement the dynamic pricing model, where the renters get charged more when there is a huge demand.

This balances the supply and demand and also improves the profitability of the platform and car owners.

Seamless features

Most of your users’ interactions will be with your platform, so it’s crucial to ensure a seamless experience.

This is where the right features and functionalities make all the difference.

Consider these features,

1. One-click booking

Allow the renter to book instantly with saved preferences and payment details. One-click booking reduces the time and effort needed for repeat booking.

The search filter enhances the search experience and allows the renter to find cars swiftly.

Consider filters, such as price, location, type, fuel efficiency, and availability.

3. Integrated communication tools

Build an in-app messaging system that allows renters and car owners to communicate and clarify doubts regarding trips, cars, or any special requirements.

4. Automated suggestions

Use machine learning algorithms to provide renters with personalized car suggestions based on their past activities.

This makes them find what they need without endlessly scrolling.

Consider these monetization strategies

1. Commission-based monetization

It is a common monetization strategy used by popular platforms such as Turo, Airbnb, and Uber.

A commission fee is charged on each transaction, typically taken as a percentage from both the car owner and the renter.

To implement, set a standard commission rate, such as 10-25%, for each rental. For instance, if a car owner earns $100 from a rental, your platform would collect a $15 commission at a 15% rate.

2. Advertising revenue

If you don’t know what in-app advertising is, let me break it down for you.

It is a monetization strategy where ads are displayed within a mobile application.

You can incorporate in-app advertising in two ways, either by partnering with third-party businesses or offering promoted listings.

However, if you consider partnering with third-party advertisers, make sure you pick the relevant ads for your platform.

For instance, businesses such as insurance providers, car maintenance services, or travel agencies are well-aligned with your app.

3. Subscription model

A subscription model involves charging users recurring fees (monthly or annually) to access premium features or reduced transaction fees.

Introduce multiple subscription tiers, each offering different perks. For example:

Basic plan: Access to the platform with standard commission fees.
Premium plan: Reduced commission rates, priority customer support, and enhanced listings (featured or top search results).
Pro plan: Zero commission fees, advanced analytics, and marketing tools to help car owners maximize their earnings.

To encourage sign-ups, offer a free trial of your premium services.

Once they see the value, they’re more likely to subscribe.

Top features to consider

The experience of the platform is defined by the features it offers.

Let’s see the important features to consider for the renters and owners.

Features for renters

1. Simple registration and onboarding

The users should easily register for the app using an email, phone, or social media account.

Any ID verification (e.g., driver's license) must be smooth to avoid friction.

Renters need flexible search options to filter cars by:

Type: Sedans, SUVs, or luxury cars.
Location: GPS-enabled search for nearby cars.
Price range: Adjustable sliders for budget preferences.
Availability: Show only cars available for the selected dates.

These filters save renters time by helping them find vehicles quickly.

3. Streamlined booking and payment

Renters enjoy the convenience of a quick and intuitive booking process.

They should be able to view the detailed car info, select rental dates, and book in minimal steps.

Moreover, the multiple payment options (credit cards, PayPal) allow the renters to pay in their preferred ways.

4. In-app communication

For inquiries or special requests, the renters should be able to message the owners directly.

Besides, they can clarify car pick-up/drop-off details and resolve any issues in real time.

5. Trip management

Allow the renters to easily manage the booking, view details, modify reservations, or cancel directly in the app.

6. User ratings and reviews

Finally, with the rating system, the renter can review the car and its owners.

This lets them express their experience and helps future users to make informed decisions.

Features for car owners

1. Effortless registration and listing

Hosts should register quickly and create listings by providing detailed car info (year, model, mileage) and high-quality photos.

Setting availability and pricing should be flexible, with options for manual or automated pricing suggestions.

2. Booking management

Hosts need to manage bookings, approve/reject requests, and sync with calendars.

Automated notifications for new bookings and cancellations help them to be informed.

3. Income and payout management

A clear summary of earnings reports, past payments, and payout options (bank transfer, PayPal) enables them to track their earnings and get a hassle-free payout.

4. Car maintenance and safety reminders

Remind the car owners of maintenance and insurance renewals.

This ensures the car remains in top condition and reduces the risks to both the renter and the host.

5. In-app communication

The car owner should be able to message the renter for smooth coordination and quick resolution of any issues.

6. Ratings and reviews for renters

Hosts should also rate the experience they had with the renters.

Marketing and user acquisition

Building a great app is just the beginning. The next crucial step is to focus on digital marketing and user acquisition to grow your platform further.

Here are some effective strategies:

1. SEO (Search Engine Optimization)

SEO is the process of optimizing your website to rank higher in search engine results. This drives organic traffic, converting the audience into users.

If you don’t know how to get started with SEO; here is the step.

Keyword research

Identify high-traffic keywords related to car rentals using Google Trends or paid keyword research tools.

Then, choose the most relevant keywords you can rank for, to target.

Content marketing

Create high-quality landing pages, blogs, guides, and resources (e.g., “Best Car Rental Options in [City]”) to target these keywords. This helps attract users organically.

On-page optimization

Ensure your website is optimized with the right meta tags, headers, and internal links, while also improving load speed and mobile usability.

Local SEO

Optimize for local search terms (e.g., “car rentals near me”) and ensure your Google Business Profile is complete, including customer reviews, addresses, and business hours.

2. App stores optimization (ASO)

ASO focuses on improving the app's visibility and ranking in app stores such as the Play Store and App Store to increase the download ratio.

First and foremost, use the relevant keywords in your app’s title and description to improve visibility when users search for car rental apps.
Use high-quality screenshots and engaging video previews to showcase your app's key features.
Ensure your app’s icon is visually appealing and stands out in search results.
Encourage users to leave positive feedback, as higher ratings improve rankings. You can use in-app prompts asking satisfied users to review the app.

3. Referral programs

Imagine your existing users do the acquisition work for you.

Well, that’s a referral program for you.

Using the referral program, you encourage the existing users with rewards or discounts and bring the new users.

Discounts to the users

Start by offering discounts to the users who refer a friend, and reward the new user with a discount on their first rental.

This creates a win-win scenario for both.

Enable single-click sharing of referral codes via email, social media, or messaging apps.

This simplified process improves the engagement.

Trackable referrals

Use referral tracking tools to monitor performance, so you can adjust rewards or promotions based on user engagement.

Loyalty tiers

Create multi-tiered rewards to encourage users to refer more people, increasing the potential for organic growth.

Targeted ads

Use platforms like Facebook, Instagram, and TikTok to run geo-targeted ads based on location, age, and interests.

For instance, promote your app to city dwellers who may need short-term car rentals.

Video and carousel ads

Create engaging video or carousel ads to showcase features, such as the range of vehicles available or how easy it is to book through your app.

Lookalike audiences

Leverage lookalike audiences to target users similar to your current customers. This increases the likelihood of app downloads.

Now, start developing your Turo-like app

From understanding the business model to creating impactful marketing strategies, we’ve explored everything.

Even in a competitive market, your platform can stand out by focusing on a niche audience or providing specialized services that competitors often overlook.

However, strategic planning is only the first step. The most crucial phase is app development.

Whether you opt for a ready-made solution or custom development, ensure the process is executed flawlessly to build a robust and user-friendly app.