“We didn’t want to get into homeownership,” Joe Paul, a resident of a community in Arizona, told the Journal. “We still want to travel and don’t want to have to maintain a house.”
Offering professional property management, routine maintenance and repairs that are the responsibility of the landlord, not the tenant, the new developments provide a sort of souped-up version of the homeowners’ association model that some communities already have.
In addition, some tenants have gone from owner to renter – and welcome the flexibility of life without a mortgage.
Matt Marooney, who rents a five-bedroom house a house in a community in Georgia, told the Journal that he previously owned a house and that renting has helped him get back on his feet financially. He would like to go back to owning, but not just yet.
Institutional ownership of single-family rental properties has been the subject of much criticism, but analyst Brad Hunter told the Journal that built-to-rent homes make up about 6% of all new homes, but could soon approach 50% as demand grows for more flexible housing.
Homeownership has traditionally been the largest factor in building household wealth in the US, but that equity doesn’t grow when paying rent.
“We need to be thinking more about different ways that people can still own the communities that they live in, outside of the primary residence model,” said Christopher Ptomey, executive director of the Terwilliger Center for Housing at the Urban Land Institute, according to the Journal.
Ptomey suggested several alternatives that could provide the economic benefits of ownership without a traditional mortgage, such as neighborhood-scale real estate investment trusts, or other fractional ownership models.
Rent the Runway, the designer clothes rental business, is now selling clothes too, entering a booming resale market.
This week, the startup confirmed that all shoppers could now buy used designer clothing from its site at a discount. Previously, this option was only available to people who paid an ongoing subscription to rent clothes.
The news of this change comes after a tumultuous year for the company. The pandemic ravaged its business and demand for renting one-off pieces or officewear dried up overnight, wiping $250 million from the company’s valuation and forcing it to close its stores and lay off or furlough half of its staff.
Meanwhile, the resale market is booming, and according to estimates from the analyst Jefferies, generates nearly $30 billion per year and is on track to make up more than 10% of the apparel market over the next 10 years.
In an interview with Vogue this week, Rent the Runway CEO Jennifer Hyman said the company hoped to broaden its reach by reselling clothes.
“This is another way for customers to engage with us for the first time,” she told Vogue. “There’s a very broad audience of people who want to consume secondhand, but potentially didn’t come to our platform in the past because they weren’t ready to subscribe, or they didn’t have an upcoming party or event.”
And by combining rental with resale, the company can boost profit margins through multiple transactions on the same item, she said.
“Because we monetize the product through subscription, by the time we’re selling something, we may have already rented it a few times and made money on it.
“We don’t have to charge as much as some of our competitors, who only have one opportunity to make their margin. There’s a value to the customer that she’s likely going to find better pricing on our platform,” she said.
Rent the Runway already has a partnership with online resale platform ThredUp, which launched in September last year and brought used, unsold inventory onto ThredUp’s site. Insider contacted Rent the Runway and ThredUp for more details on their future plans for this partnership, but did not immediately hear back.
As of Thursday, hundreds of items from Rent the Runway were listed on ThredUp’s site.
Gwyneth Paltrow, actress and founder of lifestyle brand Goop, is joining the board of directors at Rent the Runway, the clothes-rental service. The news was first reported by The New York Times.
Paltrow told The Times that she’s never actually used Rent the Runway.
Rent the Runway started in 2009 as a way to rent one-off items for special events. It’s grown into a platform for people to rent everyday clothes instead of buying new ones. It has also added kids’ clothing and homeware rentals, via a partnership with West Elm.
“What’s fascinating is that, in my own way, I’ve been renting the runway for years,” she told The Times. “Borrowing a dress from a designer for a single moment at a premiere or an awards show, then giving it back afterward. Now I guess everyone is doing it. But I’ve got my welcome code in my inbox, so I’ll soon be trying it out.”
“Gwyneth’s keen understanding of consumer psychology and unparalleled ability to tap into and define the cultural zeitgeist will play a key role in propelling Rent the Runway forward in a post-pandemic world,” Hyman said in a LinkedIn post this week, adding that the two have known each other for longer than a decade.
Rent the Runway started in 2009 as a way to rent one-off items for special events, and it’s grown to become a platform for renting everyday items as an alternative to buying new clothes. It has also added kids’ clothing and homeware rentals, via a partnership with West Elm.
Pre-pandemic, CEO Jennifer Hyman was prepping it to become the “Amazon Prime of rental” by diversifying into new areas. But when the pandemic hit, people went off the idea of renting clothes. It wiped $250 million from the company’s valuation, and Hyman was forced to close its stores and lay off or furlough half of its staff.
If you buy through our links, we may earn money from affiliate partners. Learn more.
Table of Contents: Masthead Sticky
Turo is the sharing economy’s answer to big car rental companies.
You can rent everything from a standard Honda to the latest Tesla to a retro camper van.
I’ve tried the service twice and found it to be an excellent and more affordable car rental option.
Though vaccine rollouts are well underway and travel is picking back up, travelers continue to seek safe vacation options. With social distancing remaining a top priority and many countries still not open to US travelers, domestic trips and road trips continue to reign supreme. For those without their own wheels, that means renting a car.
In fact, many of the best car rental companies are seeing such high demand that there’s a nationwide shortage. In addition to it being just plain hard to find a rental right now, prices have skyrocketed – in some cases to as high as $700 per day. As an alternative, some travelers are looking for cheaper car rentals or last-minute options via peer-to-peer rental services. That’s where Turo comes in.
Whether you’re looking to get out of town in style, tear out into the wilds, or just avoid the line at Hertz, Turo, the sharing economy’s answer to car rentals, may be the solution to your woes. What’s more? You can also now earn a little (quasi-)passive income renting your own wheels out, too.
What is Turo?
Turo is a peer-to-peer service along the lines of Airbnb or Vrbo, but for vehicles. The website (also an app) allows you to connect with individual owners who set their own prices, and to some degree, their own terms and conditions.
I’ve tried Turo in two widely different capacities. My first trip was a weeklong escapade in a 1986 Volkswagen camper van through the Pacific Northwest of the US, camping along the coast. My second was simply a means of getting from Miami International Airport down to a beach house rental in the Florida Keys in an Audi A6 convertible.
Both experiences were delightful departures from absolutely every vehicle rental experience I’ve ever had and proved why Turo is an excellent alternative to standard rental car options.
How does renting a car from Turo work?
Signing up for Turo is a breeze. Plug in your email address or sign up through your Facebook or Google account, put in a few personal details, and you’ll receive a confirmation email to prove your identity and eligibility as a driver (license required).
Searching for a car is exactly like hunting for a vacation rental on Airbnb. Enter the name of the place you’re going, your scheduled dates, and either select the type of car you’re after or sift through the 850-plus unique makes and models within Turo’s database of hundreds of thousands of vehicles across more than 5,500 cities across the United States and the United Kingdom.
Of course, you’ll have better luck finding your dream car in more metropolitan areas, at least for now.
Car pickups vary from owner to owner, but if you’re lucky, the vehicle will be brought right to you. You can also filter for this option, which I highly recommend.
As with any rental, upon receiving the car, make sure to do the whole once around to ensure it’s in good shape. After simply showing your license, the car is yours.
When you’re finished with your trip, top up the gas to match where the needle was on the gauge when you picked it up before returning the car. If you don’t manage to refill the gas tank, you’ll pay a prorated fee per gallon (usually steeper than the prices you’d find at the pump). You can also opt for insurance and varying degrees of coverage just as you can with a traditional agency.
Give the car another pass with the owner or the representative present, hand over the keys, and you’re all set. The owner might offer to meet you at the airport before your flight, or drop you off somewhere, but this is case by case, and you’ll usually have to arrange that ahead of time. Reviews, as with anything in the sharing economy, are encouraged (and the owner ought to do the same for you).
How much does Turo cost?
The price of cars on Turo varies greatly and is entirely dependent on the make, model, and owner setting the price. However, Turo is frequently a more affordable experience compared with many of the rental agencies.
Looking two weeks out at rentals in San Francisco, for example, Turo’s rental prices start at a $25-a-day 2010 Mazda 6 (plus insurance, but more on insurance below), while, due to the surge in demand currently, an entry-level rental at Hertz in San Francisco will run you $149 (and you’re not guaranteed the vehicle you select at checkout) before getting to insurance.
Though using Turo as a more affordable car rental option is certainly a good use right now, the real fun starts in the $150 to $200 range. While that price would likely land you a Buick Regal “or similar” at a standard rental company during non-shortage times, you can land a Tesla Model 3 for a similar price on Turo. I’m no snob, but given the choice, and the level of service (pickup at your door), the choice seems like a no-brainer.
Of course, those who have a little money to burn could also pick up a Ferrari in California ($539/day), but insurance through Turo on such premium cars will run you upwards of $100 per day.
Do I need to buy insurance for Turo?
If you already have car insurance, consult your company first, as they may cover you (as they would with traditional agencies) depending on your level of insurance. If you’re purchasing insurance through Turo, there are five different levels of insurance to consider, but you’ll be covered through your rental with basic liability insurance through Liberty Mutual for up to $750,000, and it starts just shy of $20 per day.
My review of Turo
Having lived in a camper van in a past life, I’m all too eager to jump at the chance to relive it whenever I can. So when Turo’s team wrote and asked if I’d like to try out a vintage VW camper van, I didn’t hesitate to take them up on it. Off I went to Seattle.
The owner arranged to pick me up with Gretel (the stunningly pristine specimen of an automobile you see above) so I could prove my capabilities with a manual transmission. Fair enough: I certainly wouldn’t entrust a classic vehicle to someone without vetting their driving skills first, either.
Granted, this is a special occurrence, and so long as you’re not renting a classic vehicle with a manual transmission, you probably won’t be put to the test. It should go without saying that no one ought to rent (or drive) a vehicle outside of their comfort capabilities.
After passing my short road test, I was free roam wherever I pleased (within reason) at the helm of Gretel for a week. I did, however, have a 1,500-mile limit, and would incur further charges if I surpassed it (0.75/mile). I ended up driving a couple of hundred miles over, which was a fee of about $150 more. Over the course of a week, getting to drive the Lost Coast of Northern California and sleep in the Redwood Forest though? Worth it.
The van also came stocked with everything I needed, from a sleeping bag, pillows, blankets, and sheets, down to a coffee pot, oatmeal, coffee, and kitchen cloths.
I dare you to try to find a hotel room on a cliff above the Pacific for less than $200 a night. You might luck out, but add the cost of a car rental to that. (Keep in mind that a Honda Accord will not exactly get you here.)
When you return someone’s pride-and-joy-on-wheels (keep in mind that old VW Vanagons are collectors’ items), they’re probably going to go over the thing with a fine-toothed comb. The owner of this particular vehicle did just that, and while I was embarrassed by the moderate disarray of things, he in turn told me I was the cleanest renter yet. Owners can potentially put up a fuss (just like with Airbnb), but the best course of action is to be considerate, courteous, and clean up after yourself. They expect to have to clean a little, but as with any rental or hospitality experience, there’s no need to go all Motley Crew on the poor set of wheels. If you do, there’s a good chance you’ll end up paying for it.
After such a positive experience, I decided to try out Turo again during a road trip to the Florida Keys. This time, I was seeking a standard set of wheels to take me from the airport to my final destination. If you’ve ever picked up a car rental from the airport, you’re surely acquainted with issues that often pop up like long lines, faulty reservation systems, or just a super long walk from the terminal.
Save yourself the stress, and maybe the loss of your cool, and try Turo out at the airport. Arrange your car (at least 24 hours ahead of time to be safe), input your flight time, your ETA at arrivals, and your rental will be parked out front with either the vehicle’s owner or a representative on their behalf (there are a few small agencies using Turo, too). Show them your driver’s license, and off you go.
I went through this entire process without even the hint of a hitch and didn’t have to go searching for some far-flung rental agency outpost on the outskirts of the airport.
The Audi A6 was in immaculate shape, clean and detailed. The transition was smooth, and while I might not have mistaken it for a brand-spanking-new car fresh off the lot, it was in every bit as fine a shape as anything I’ve ever rented from Avis or Hertz.
Granted, just as with Airbnb, you’ll see some variation on a case-by-case basis. The difference between renting a 1980s-vintage VW Vanagon and a late-model sports car is about as immense as you could imagine. Think fully detailed interior versus a throw blanket over stained or torn upholstery. You’ll also be able to get a feel for the condition of the vehicle based on its profile online and reviews.
And again like Airbnb, your experience is going to largely depend on your host (they also receive ratings). Some hosts make renting vehicles on Turo their primary occupation; they’ll have a crew of drivers and a slew of vehicles. This was the case with the Audi I rented, and I felt like I received executive service as a result.
Are car rentals safe?
The CDC has stated that fully vaccinated people may safely travel in the US. If you’re wondering if renting a car is safe, we spoke to experts who say yes, as long as proper precautions are taken.
Turo has also updated its policies and guidelines to help ensure safety. Hosts are urged to disinfect cars after every trip, but guests booking cars should also bring their own wipes and sanitize all surfaces as an extra safety measure. It is also highly encouraged not to meet in person and instead, hosts should set up remote key handoffs via lockbox or via digitally upgrading to Turo Go if you’re located in the San Francisco Bay Area, Los Angeles, or San Diego.
Even if you’re not the adventurous type, Turo offers a convenience you don’t get with any of the big rental companies, and that makes all the difference.
This isn’t to say there isn’t still a time and place to use more traditional rental agencies; in remoter places, there’s a good chance you won’t find any Turo listings, and in the case of one-way trips, Avis, Hertz, Enterprise, and the like are all likely your only option, unless you can manage a special (albeit highly unlikely) arrangement with a Turo vehicle’s owner to meet you at your end destination.
Whether you’re heading out to the beach, up into the mountains, straight to a hotel room, or just looking for something a little spiffier or more functional (and fun) than a Chevy Malibu, it’s plainly and simply the easiest way to rent a car.
Pros: More affordable and convenient than most (if not all) vehicle rental agencies
Cons: Like Airbnb, quality control is tough (but improving), one-way rentals usually aren’t possible
Regy Perlera, 28, is the founder and CEO of Seasons, a menswear rental platform.
Seasons raised $4.3 million in 2019 from investors such as Alexis Ohanian’s Initialized Capital, Notation Capital, and the rapper Nas. It currently offers over 500 products and has 18 official brand partners.
Perlera launched the company in November 2019 after noticing many rental platforms were targeted toward women, but few were focused on men.
In an interview with Business Insider, Perlera talks about his company Seasons and how he wants to redefine ownership for the next generation.
In the summer of 2019, Regy Perlera found himself scurrying around New York. He had just left his job as a product designer at Nike and was on the hunt for investors for a new idea: a platform that would allow men to rent designer clothing.
Perlera said investors were skeptical. Sure, Rent the Runway hit a $1 billion valuation in 2019 and other rental fashion platforms have appeared, but those mostly cater to women. He said investors wondered whether men care enough about fashion or the environment to use this kind of platform.
“I remember taking [investor] meetings in every borough,” Perlera, 28, told Insider. “The first few weeks were tough.”
But he was able to convince at least one big investor on his idea: Alexis Ohanian, serial investor and cofounder of Reddit. By the end of July 2019, Perlera was able to raise a $4.3 million funding round from investors including Ohanian’s Initialized Capital, Notation Capital in Brooklyn, and the rapper Nas.
Perlera told Insider that he wants his company Seasons to redefine ownership for the next generation, so consumers won’t have to buy products, only to throw them out soon after. “We’re trying to change the way people think about ownership,” he said.
The platform currently allows users to rent archival luxury from brands such as Prada, Gucci, and Dior, as well as contemporary ones like Jacquemus, Marni, and Our Legacy.
As for the name? Well, its product offerings change based on the seasons, naturally.
Reconnecting with an old partner
After this funding round, Perlera reconnected with an old friend, Luc Succes, 30, who came aboard as cofounder.
They gave themselves four months to build Seasons, “a really tight deadline,” said Succes, now the company’s chief technology officer.
After building the app and the website, Seasons launched the next November, even though investors were saying to wait until March 2020. “Now we know how that would have gone,” Perlera said, expressing his gratitude that he didn’t launch in the midst of the coronavirus pandemic.
The company closed another funding round in February, which helped it get through the year. It still had to temporarily shut down its warehouses, and it began selling more vintage clothing, a decision made by the company’s buying director, Jesse Hudnutt. These vintage buys made up 40% of the company’s summer purchases, on trend with millennials’ increasing interest during the pandemic in vintage clothing, as Insider previously reported.
Inventory is a problem for Seasons, Perlera acknowledged, mostly because it’s so expensive to acquire, and sizes often sell out quickly. To manage demand, the company decided to implement a membership tier program in November 2020, with prices ranging from $65 to $175 a month.
Also, the platform currently services just a limited amount of people, but users have jumped at the opportunity to sign on. When Seasons launched its membership program last year, seeking to cap its users at 300, Perlera said more than 200 signed up within weeks.
“If you think about letting anybody and everybody come to the website, you risk compromising the availability of sizes and styles for people that were already on the platform,” Perlera said.
Right now, the company sources merchandise from more than 18 official brand partners. At first, it didn’t ask brands for permission to sell their products on their platform – Perlera and Succes simply bought the clothes in stores and then offered them on the platform. This was, Perlera said, to prove that people were interested in renting rather than actually buying menswear. Today, Perlera said companies come to them.
Currently, Seasons rents out more than 500 pieces of men’s clothing and has expanded from its initial New York market to locations including Los Angeles, Atlanta, Chicago, and Phoenix.
Perlera says he just wants people to care
Perlera and Succes have a long working history – they previously cofounded another tech startup, Often, which lasted from 2014 to 2016.
“There was a moment where, after we went our separate ways after starting the first company, Often, I realized that there was just something really special about building product with somebody that cared the same amount as you did,” Perlera said.
They decided to give entrepreneurship another go, and that’s when Seasons came about. Perlera said they learned from their first startup experience together when it came to finding investors for Seasons.”The second time around, I think we had to build a reputation that we could build a product,” Perlera said.
So when it comes to finding ways to keep the planet alive, the internet has told young people that there isn’t really another option – they have to care. Maybe renting a Prada bucket hat will make it easier.