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Disruption: when good comes from havoc. The IPA goes to Silicon Valley

November 13, 2015 | 5 min read

I have a serious problem with car rental companies. You travel on business or on holiday. You book car hire online carefully based on your requirements. There are lots of forms, the website is a hassle to use, the car model choice is limited.

Done at last. All sorted, you think. The day comes. You are tired after your flight and want to quickly get on the road to your destination. You get to the car rental desk. And it begins. First you wait an hour in a queue.

Next it's "sorry sir, we don't have the car you ordered online. You can have a more expensive one. Damage waiver insurance sir? Sat nav hire sir? Fuel refill policy sir?". It takes 45 minutes to do the paperwork. And that's just the pick up.

The customer feels like a stooge for shameless moneymaking scams. Service is a hassle. It's not a pleasant experience.

Familiar? Of course it is.

The disrputive answer

Yesterday I visited a new alternative to this in San Francisco on the IPA US West Coast Advertising Mission. Meet 'Turo'. Turo's purpose is to put the world's billion cars to better use. This car share technology company encourages people to make money out of renting their car to strangers using their platform.

Car photography on the Turo platform is professionally managed, just like Airbnb. You choose exactly the car you want in the location you want for the time you want and the owner hands over the car keys to you in person. You return it back to them when you're done.

Turo's business model claims to save renters 35% against average car rental prices per day. And that's not all. Face-to-face rental handovers have reduced insurance damage claims too by 60-70%. You care more about a car where you know the owner. Millennials don't tend to own cars and have embraced 'share' scheme models in other categories, big -style. Turo seems a perfect fit for this generation.

Turo has big ambitions to grow its US and global market share of the $65bn car rental market. $101m in funding backing has been raised to date. That's pretty serious.

To this end, Turo takes a 25% cut of the rental price which includes innovative insurance options protecting both renter and owner. The owner retains 75%. The platform has a reputation system for renters to rate their experience.

Turo claims 75 Net Promoter Score compared to traditional car rental at 25. And the key word here is 'experience'. There have been several high profile car share schemes before that have failed on bad economics as low cost pure plays.

Turo looks different. It's sussed that to be successful you have to be better, faster and cheaper than what already exists. Turo is not just about cheaper car rentals and convenience. It's also about control over the particular type of car you'd like to drive and a personalised drop off and pick up with the car's owner.

From a Mini to an Aston Martin. Whatever you want. An enjoyable drive in a cool car...In short, it's all about experience based on better.

There are challenges of course. As a car share model, how does Turo get people to trust it in order to share their own car with strangers ? How does Turo reassure renters that its cars are really safe and the insurance cover it offers is robust ?

What happens if your car is a hire purchase and you don't actually own it; Can you still rent it through Turo? What happens when things go wrong ? Will Turo get enough rentals for the business model to work economically? What will happen to the traditional car rental companies if Turo takes off?

Disruption across the board

You're probably thinking this sounds a lot like Airbnb and Uber and you'd be right. This week in Silicon Valley, disruption has been the big underlying theme. Disruption in car rentals, disruption in retail through use of robotics, disruptive holidays into space, disruption of currency models for goodness sake and of course disruption of advertising through converging creativity, data and technology.

The dictionary definition of 'disruption' is: to interrupt or cause a disturbance or problem. To destroy or drastically alter the structure of. To wreak havoc or cause disarray or disorder.

Now think back to that current car rental experience I started this piece with. And think about those traditional car rental companies that I'm not a fan of and how that business model is ripe for change. Ripe for disruption.

Turo, you certainly have a new disciple in me and I wish you every success on your journey to create some good out of havoc.

Ben Quigley is IPA Chairman England and Wales & Group Chief Executive, Everything Different

Follow further highlights from the IPA/UKTI Silicon Valley Mission on / and on twitter @IPA_Updates #createuk

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