Turo, the peer-to-peer car-sharing service, has filed for its initial public offering, the latest transportation-related startup to sell its shares on a public stock exchange. The company proposes to sell $100 million of stock, but that figure could change as Turo gets closer to its public debut.
Founded in 2010, the San Francisco-based company allows people to rent out their personal cars to other customers, much like Airbnb does for homes. In its S-1 filed with the Securities and Exchange Commission, Turo claims it has 85,000 active hosts (meaning vehicle owners), 161,000 active vehicles, and 1.3 million active guests over the period of 12 months ending September 30th, 2021.
opting for an old-fashioned IPO rather than a SPAC
Unlike many transportation-related startups in recent years, the San Francisco-based company is opting for an old-fashioned IPO rather than merging with a special acquisition company, or SPAC. Turo also stands out because it’s not specifically tied to electric or autonomous vehicles, which have mostly fueled the recent SPAC and IPO craze.
Similar to other transportation startups, Turo has lost money every year its been in operation. As of September 30th, the company says it lost a cumulative $544 million.
The company plans on offering some of its shares exclusively to its users, both renters and owners, in a move similar to what Uber did when it offered specially priced shares to some of its drivers. Turo says it plans to offer 5 percent of its stock to “eligible hosts and guests on our platform and certain individuals identified by our officers and directors.”
Turo claims it avoids the costs associated with owning large fleets, like its competitors in the rental car business like Avis, Hertz, and Enterprise, while also helping its hosts earn extra cash by renting out their unused vehicles. And Covid-19 has helped boost Turo’s business in relation to these legacy rental car services, the company says.
“Rental car companies reduced their fleet sizes in the early days of the COVID-19 pandemic and have been unable to quickly rebuild their fleets due to constraints in automobile manufacturing capacity,” Turo says. “In light of these conditions, more consumers turned to peer-to-peer car sharing for their vehicle needs.”
Turo has run into regulatory hurdles in the past. The company was sued by the city of San Francisco in 2018 for failure to pay the fees required to operate legally at the SFO airport. The company counter-sued the city, claiming it shouldn’t be subject to the same regulations as legacy rental car companies. A judge eventually ruled in the city’s favor.
But there have also been some bright spots. Recently, New York State passed legislation legalizing peer-to-peer car-sharing, which is set to go into effect in the latter half of 2022.